New Delhi, Feb. 24 -- Have you recently received a lumpsum payment in the form of an annual bonus from the employer, variable pay, maturity amount from an investment, etc? Are you thinking of using it to close your personal loan? In this article, we will discuss what personal loan pre-closure is, its types, its benefits, and what factors you should consider before proceeding with it.

When you take a personal loan, the bank gives you a schedule with the EMI details. The schedule has the date till which the personal loan repayments will continue. When an individual decides to make a lumpsum payment and close the personal loan before its schedule, it is known as pre-closure. The lumpsum amount includes the outstanding principal and the pre-...