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Articles Tagged with: prepayment

Benefits of Personal Loan Pre/Part Payments

A personal loan part payment can be availed when an existing loan borrower has a lump sum amount of idle money, which is not equivalent of the principal outstanding loan amount(balance). The part payment is one of the best ways to bring down your principal outstanding, which in turn reduces EMIs and the total interest you pay to the lender. A borrower can avail a personal loan part payment after 6,9 or 12 months of loan repayments (varies from lender to lender) and also the amount of part payment either be the (multiple of EMI or % of principal outstanding). Not all banks and NBFCs allow personal loan part payments and those which do, levy certain charges on the same. Be a smart borrower and avoid part payment if you have a small lump sum as it creates a negligible effect on your EMIs and also makes you bear the related charges.

What is Personal Loan Part Payment?

A personal loan part payment is one such facility, wherein an existing loan borrower can repay a part of the principal loan amount, which help in reducing the EMI along with the total interest. Personal loan part payment is beneficial if you have a bigger chunk of the amount available at your disposal. Yes, a good sum helps in reducing your loan repayment burden by bringing down your principal outstanding significantly, thus gives you a big relief. An existing loan borrower can avail this facility after 6, 9 or 12 months of repaying his EMIs. However, not many banks and NBFCs offer part payment facility and those who do, levy a certain charge on the same.

How Can Do Personal Loan Part Payments?

The process of personal loan part payments is really easy and quick. An existing borrower needs to inform his/her respective lender in a written format to avail this facility. Once you receive a yes from your lender, you can proceed ahead with the process. It all starts when you repay a bigger portion of your outstanding loan balance(principal amount) that will also help in reducing your monthly installment burden. Both salaried and self-employed individuals are eligible to reap the maximum benefits of this facility.

Personal Loan Part Payment is Good or Not?

Of course, personal loan part payment is good and that too in many ways. When a borrower opts for the same, it not only helps in reducing the principal outstanding, which lowers the interest burden. But personal loan part payment has a lot to do with your EMIs and tenure. Yes, after opting for the same, the overall loan burden of a borrower can ultimately be reduced, which leads to easy EMIs. Also, a borrower can have flexibility with respect to tenures,i.e choose a loan repayment schedule by keeping the EMIs pocket-friendly. After part payment, a borrower can choose the loan repayment tenure according to his pocket, i.e. he/she can increase or decrease the loan tenure as per the convenience.

Top 3 Benefits of Personal Loan Part Payments

1.Reduced Principal and Interest: One of the top benefits of personal loan part payment is reduced outstanding loan amount, also result in lowering the interest paid on your loan. A good amount of lump sum can drastically bring down your principal payment, which means a borrower has less liability towards his/her existing lender. Yes, the part payment amount directly gets deducted from your Principal Outstanding as on date/month of making partial payments.

Let’s understand this with the help of an example below:
Suppose, you have taken a loan amount of Rs.3,00,000 for a tenure of 5 years at an interest rate of 15%, and you have a lump sum amount of Rs.50,000 to pay. Then let’s just see the see a comparison of pre and post scenario of personal loan part payments.

Particulars	Part Payment Repayment	Normal Personal Loan Repayment
Loan Amount	Rs.3,00,000	Rs.3,00,000
Rate of Interest	15%	15%
Tenure	5 Years	5 Years
Part Payment (9th Month)	Rs.50,000	Nil
Outstanding Loan Amount after repaying 9 EMIs=Rs.2,64,160 for the Next 4.3 Remaining Years(60-9=51 months)
Loan Amount after Part Payment	Rs.2,64,160-50,000= Rs.2,14,160 (remaining loan balance to be paid)	Nil
Total Interest Paid	Rs.76,760(4.3 years)	Rs.12,8,219(5 years)
Savings on Interest	Rs.12,8,219-76,760=Rs.51,459
Total Interest Percentage	26% of the loan amount	30% of the loan amount
Interest Saved	4%

2.Pocket-friendly and Huge Saving on EMIs: Reduced principal outstanding means easy EMIs.Yes, personal loan part payment allows you to have affordable EMIs, as the bigger portion of your principal loan amount has already been paid. With pocket-friendly monthly installments, you can have less loan repayment burden, which means minor chances of personal loan default.

Let’s have more clarity by looking at the table below.

Below is a table showing reduction and Savings on EMIs

Particulars	Part Payment Repayment	Normal Personal Loan Repayment
Loan Amount	Rs.3,00,000	Rs.3,00,000
Rate of Interest	15%	15%
Tenure	5 Years (60 months)	5 Years (60 months)
Monthly EMIs	Rs.7,137	Rs.7,137
Part Payment (After 9th Month)	Rs.50,000	Nil
Outstanding Loan Amount after repaying 9 EMIs=Rs.2,64,160 for the Next 4.3 Remaining Years(60-9=51 months)
Remaining Loan Amount after Part Payment	Rs.2,64,160-50,000= Rs.2,14,160	Nil
New EMI After Part Payment	Rs.5,704	Nil
Yearly EMIs	Rs.5,704×12=Rs.68,448	Rs.7,137×12=Rs.85,644
EMI Savings	Rs.85,644-68,448= Rs.17,196

3.Fewer Chances of Loan Default: With affordable EMIs comes lesser chances of personal loan default. If a borrower has a pocket-friendly EMIs, there would be no problem in repaying the loan, which simply leads to fewer chances of default. And, lesser default possibilities and the timely loan repayment will ultimately boost your cibil score, making your credit profile healthy in front of the lenders. Yes, your cibil score will improve with the same and your credit profile looks promising to the lender for future borrowings.

Quick Tip: There are some banks and NBFCs that offer personal loan part payment more than once. Yes, a borrower can opt for part payment of more than one time. Also, there are a lot of conditions attached to the same. Thus, it is advisable to check the same with your respective lender to reap the maximum benefits of the same.

So, hope this insight on personal loan part payment would be useful and will help you to save on your existing loan.

Two Wheeler loan

Best two wheeler loan providers in Delhi NCR

Are you planning to purchase a bike anytime soon? Are you worried about the finances and want to apply for two wheeler loan soon? If so, then let us take your worries away. Quikkloan is the best two wheeler loan provider marketplace is here to resolve all your worries.

What is a two-wheeler loan?

Two-wheeler loan is an amount that a buyer borrows from a bank to purchase a two-wheeled vehicle such as a scooter or motorbike etc. It is generally easier to get a loan approved from two-wheeler loan providers and the interest rates are also affordable.

Types of two-wheeler loans

You should know the types of two-wheeler loans available in the market even before you reach out to bike loan providers to apply for two-wheeler loans

Secured loans

Secured loans are taken against security or collateral. The collateral can be home, lands, bonds etc. These loans are easily available with a lower rate of interest.

However, you risk losing your assets in case of non-repayment of the loan.

Unsecured loans

These loans don’t need any collateral for 2-wheeler loan sanction. However, the rate of interest is quite high and not so easy to get.

Features of 2 wheeler loans

Credit score: A higher CIBIL score will fetch you a 2-wheeler loan easily. Keep the score high before you apply for two-wheeler loans.

The margin of finance: The margin of finance can go as high as 90% with some bike loan providers. Therefore, you need to just pay 10% as down payment.

Annual Income leverage:

You can apply for two-wheeler loans if you earn at least INR 50,000/- annually. Since loan tenure can extend up to 4 years, your EMIs won’t pinch your pockets.

Other costs:

It is good to cover the costs of accessories, insurance and registration in loan amount. The premium is often less if extra security and safety features are present in the vehicle.

No prepayment fee:

Many bike loan providers don’t charge a prepayment or foreclosure fee.

Eligibility

Age: You need to be a minimum of 18 years old to apply for two wheeler loan. Some bike loan providers also have21 as minimum age criterion.

Employment details: Salaried and self-employed with regular income can apply for two-wheeler loans. Most bike loan providers have minimum income criterion too, though it’s quite low.

Residential status: You Should have a minimum of 1 year in current residence to apply for a Bike loan

Credit score: You should have minimum 700+ CIBIL score to get loan approval. You can try peer-to-peer lending companies in case you have low CIBIL score.

Documentation

You need the following documents before approaching a two-wheeler loan provider.

ID proof such as PAN, Passport, Driving License, Voter ID and Aadhar card
Address proof such as electricity bill, mobile bill etc.
Employment proof: Salary slips and bank statements
Photographs

Fees and charges

The processing fee is charged for processing the loan request. Prepayment fee is quite negligible in most banks and almost zero in some. Late payment fee is charged on EMI payment missed during loan repayment tenure. Some banks charge administrative Fee sometimes too.

If you need further help on 2 wheeler loans, do visit Quikkloan for quick and hassle-free guidance.

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Loans

Personal Loan: Golden Rules to Repayment

The moment we want to buy something to fulfil our dreams and find ourselves financially weak, we think to pally for personal loans. The best lenders for personal loans excite us a lot about short term personal loans. But we often forget the golden rules to repayment before we apply for personal loans. Quikkloan– a leading personal finance marketplace– brings to you the golden rules of repayment of the personal loan.

Choose comfortable EMI schemes

While you apply for personal loans, you must choose an EMI scheme that you are comfortable with for repayment of the personal loan. If you are repaying previous loans, then you must go for lower EMIs for the next personal loan. Most instant and easy loan providers will entice you for higher EMIs. But the best lenders of personal loans– like Quikkloan– will advise you to figure out what kind of EMI does not put you under pressure.

Your total EMI must not exceed 40% of your total monthly income. Repayment of the personal loan must never interfere with your normal or desired lifestyle. The best lenders of personal loans will help you with a personal loan EMI calculator to check your EMI. Don’t forget to check out the EMI calculator offered by Quikkloan.

Payless interest

If you are comfortable with high EMIs, then you can be at a serious advantage. Repayment of a personal loan with a lower number of higher EMIs will help you to repay with less outgo. The interest is a drain of your money and since loans are negative compounding, the higher the tenure, the more the drain of money in compound interest. Choose the best lenders of the personal loan who offer short term personal loan.

Never delay EMIs

The repayment of the personal loan must never face a delay in EMI payment. Having any delay in your EMI payment will affect your credit score negatively and this can reduce your creditworthiness. If repayment of short term personal loan is getting difficult, then explain the situation to the bank or the personal finance provider and get the number of EMIs increased with EMI amount lowered. Moreover, you can also transfer the existing loan to a new loan with a lower interest rate, thereby reducing the personal loan debt.

Prepayment helps

If you have got the extra disposable amount in your hand, then it is best to prepay the loan and get relieved of the debt. Repayment of the personal loan before the end of tenure helps in saving EMIs. Please note that some banks also charge penalties for prepayment. So, before you apply for personal loan, look out for best lenders for personal loans around you that charge zero or negligible charges for foreclosure of the loan. Most instant and easy personal loan providers may not tell you about foreclosure fees in advance.

You must apply for personal loans when required to fulfil your dreams. But tread cautiously and remember these golden rules for repayment of personal loans. Quikkloan can help you with tips on repayment of the personal loan in Delhi. For any queries, feel free to contact us.

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