Prepayment

Prepayment is the payment you make over and above the regular EMIs you pay during the repayment of a loan. A prepayment may be in part or full which is called part-prepayment or foreclosure, respectively. Prepayment helps you pay off the early and become debt-free faster. It also reduces the total interest you pay on a loan, as it reduces the principal due. For instance, say your remaining loan balance is ₹10,000  and your EMI amount is ₹2,500/month but you prepay ₹5000, your loan balance reduces to ₹5000. This can help you repay the loan faster and decreases your interest dues.