NO more cash crunches! Bankruptcies! & Low Credit Scores! You can avail quick Personal Loan for any type of financial need, either for long-term purposes or short terms. Whether it’s a marriage expense or a travel expenditure, Personal loan for short term holiday. Buddy Loan, known for its personal loan disbursal across India is trusted by many and suited by far millions. Avail quick personal loan online with Buddy Loan as, it involves very less documentation and helps you get good repayment options; thus, you can build a good CIBIL/credit score. You can choose a personal loan like a car, bike, and home loan too.
Difference Between Pre-Payment And Part Payment of Personal Loan
The interest rate paid on personal loans is very high at about 15-20 percent, the reason being these loans are mostly unsecured in nature. Personal loans are very popular in India as they help people get access to cash for temporary or urgent needs.
Explore Buddy Loan App in order to reap more benefit for any personal loan. This loan aggregator disburses the loan at an interest rate starting at 11.99% p.a. Knowing what fits better for the borrower’s profile there many viable options Buddy Loan offers to settle the repayment with a tenure of 5 years.
Cash amount such as loans for consumer durables, health treatment, wedding or even vacations is offered by a number of banks with little variations in the fees and charges. If these loans can be prepaid or partly paid, there are certain advantages which customers can avail.
Prepayment:
If the prepayment is done early on during the tenure of your loans, you can end up saving a lot of interest. Generally, a personal loan comes with a lock-in period of about one year after which entire outstanding can be prepaid.
For Instance
If personal loan principal amount is of 2 lakhs at an interest rate of 11.99 % and tenure of five years, The monthly EMI amounts to Rs 4449. The total amount to be paid with interest sums up to Rs.2,66,933. If customer prepays now the full amount, he would save Rs 57,422 interest payment.
Suppose personal loan is of 3 lakhs for the tenure of 5 years at an interest rate of 11.99%, an extra interest of Rs. 1,00,400 should have been paid. The loan EMI payment would be Rs ₹6,673 or about 33% of total interest, second-year payment would be Rs 35,084 or 27% of total interest, while one pays Rs 26,956 in the third year or 21% of total interest, Rs 17,522 or 14% in the fourth year and Rs 6571 or only 5% in the final year. The above example holds good for a floatable interest rate.
The trick is to prepay the entire amount in tenure of the loan so that one can take advantage of paying less on interest.
Part Payment:
Part-payment of a personal loan refers to paying a lump sum amount of money, that is a part of but not the entire outstanding loan amount. This works because it brings down the unpaid principal amount, which in turn reduces the EMIs and total interest paid. However, one has to keep in mind it only works when you pay off a significant amount in one go.
It is an easy but effective way to reduce your interest amount as part payment directly gets deducted from one’s principal outstanding effectively from the particular date or month when the partial payment is made.
For instance, if you take a loan of 3 lakhs for 5-years term at 15%, you will have to pay an interest amount of RS 1,28,219. However, if you make a nominal partial payment of INR 50000 after your 6th EMI, you will end up saving 32% of the interest amount.
Also Read: Travel Loan With Highest Benefits
Avail Quick Personal Loan For Short Term Holiday
Personal loans can generally be taken for a variety of purposes like, for renovating your home, for your marriage expenses, for buying a car, for medical expenses or for any other occasions. Hence, you can definitely secure a personal loan to enjoy your holiday or vacation. To enjoy more benefits such as increasing the credit score and ample repayment option, explore Buddy Loan, one of the best loan aggregators.
However, there are several advantages and disadvantages to securing a personal loan for your travel and vacation that need to be taken into consideration.
Also Read: Making the Best of Long Weekends in 2024
Advantages
1) The specific interest amount to be paid – Personal loans have set the lower interest rates starting at 11.99%p.a., which needs to be repaid. This makes it easier for the borrower to plan his income and payments in advance.
2) Specific term – Besides the interest on a loan being specified, the term within which the loan must be completely repaid and the intervals of payment of interest are also specified.
3) Unsecured personal loans – Personal loans are mostly unsecured in nature, or in other words, they may not necessarily require collateral if you have a good credit score.
4) A better alternative than a credit card – Securing a personal loan for vacation is better than accumulating more debt on your credit card, as in case of loans, the amount of payment and terms for payment is pre-determined.
Disadvantages
- Paying more than the amount spent – Whenever you secure a loan, it is obvious that you pay more than you borrowed, given that you pay the principal amount and an interest rate starting of with 11.99 %p.a. You must consider this before you procure a personal loan for your vacation.
- Secured loans – Unsecured personal loans are not available to all. If you have low credit scores, then you may not be eligible for unsecured loans, and hence, you would have to involve your collateral to procure a personal loan. This is the reason you must think twice about attaining a personal loan for your holiday if you do not have a good credit score, as it would put your assets into risk.
- Future is unpredictable – Future being unpredictable, it may be difficult for a borrower to repay the loan or to pay interests on time due to an unavoidable financial crisis.
Hence, weighing the advantages and disadvantages, it can be concluded that securing a personal loan for a vacation must be preferred less in case you have other alternatives such as your savings or deposits. However, a personal loan for a holiday is a better alternative than spending from your credit card, if you have no other choices to enjoy your vacation.
You Can Foreclose Your Loan Amount
The pressure and burden of paying EMI monthly are worth relieving. This is the reason some people choose to pay off their loan before the loan tenure ends. However, loan aggregators help you with the best repayment options for a good 5 years. Explore Buddy Loan in order to reap more benefits from any loan.
Foreclosing is an early prepayment of a loan before its due date. People want to pay off their mortgages before the due date so that they are free from the burden of paying for the loans.
However, not all banks allow the borrower to foreclose your loan borrowed from them. Some banks have a lock-in period for your loan. You have to pay EMI for a year before you are allowed to foreclose your loan.
Foreclosure of the loan may happen from either the borrower’s end or from the bank’s end. However, the bank only comes in when the borrower is unable to service its EMI.
Ways To Foreclose A Loan!
You can choose to foreclose a mortgage by :
- Paying part payments: In this, however, only applies if you get a lump sum amount of money at your disposal. This method, you may pay off a substantial amount of the loan at one go. Then you will have only a small amount to pay for a shorter period.
- Clear the whole amount: When you can get the entire amount due to the lender. You can pay it all at a go and clear off your online personal loan. This will be a great relief, and you can set your mind to concentrate on other ventures
Benefits To Foreclosing Your Loan
Enhances Your Morale:- Paying monthly EMIs can be strenuous to the mind. However, when your business succeeds and you get the amount due, you can pay it back and get the ultimate sense of relief. You can then set your focus on expanding your business more.
You Can Save More:- When you pay your loan before your due date, you can save on interest costs. The amount you save is the fund that can be used for another aspect of your business or personal life.
Positive Impact On Your CIBIL Score:- When you pay your EMIs on time, your credit score increases. The same thing happens when you pay off the loan before the due time. This puts you in a better position when you are applying for a loan, the next time.
Also Check: Check Your Credit Score For Free
Causes of Foreclosing
There are times an individual may choose to seize their business due to the ongoing challenges. As it may be for,
- Negative equity
- Rising interest
- Disease
- Divorce
A Personal Loan Can Be An Attractive Option During An Emergency!
Some benefits of a personal loan can serve you with urgent funds during times of emergency and otherwise.
Multipurpose Loans:- Personal loans can be used for various needs like weddings, medical costs, home renovations, education support, and debt repayments without many restrictions.
Free of Collateral:- You do not need to pledge, provide any security or collateral to get a personal loan.
Instant Disbursal:- If you meet the eligibility criteria and have a good credit score, you can get a personal loan in as quick as 24 to 72 hours. In fact, some of the banks also provide a pre-approved facility for their existing customers.
Hassle-free paperwork:- It only takes minimal documentation to avail an instant personal loan. You are just required to submit your personal information, income information and employment information. Existing pre-approved applicants of banks are not even required to submit any documents in some cases.
Low-Interest Rates:- Many banks and NBFCs offer personal loans at affordable interest rates to salaried individuals working with top and reputed corporate. Personal loans start at a minimum rate of 10.75% and can go up to 22% p.a. The interest rate usually depends on your eligibility and CIBIL score
Tax Benefits:- Depending on how you use it, a personal loan can provide tax deductions. For construction, renovation, or house down payment, you can get up to Rs. 2 lakh deduction under Section 24B. Similarly, using the loan for business requires proper documentation for tax benefits.
Fixed-Rate of Interest:- A personal loan offers fixed interest rates for consistent EMIs, making it a dependable choice. Easy access for those with good credit histories and stable employment. Online aggregators simplify comparing, applying, and securing loans.
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