People usually get a personal loan to get over financial crises. In this loan, the bank provides you money at some rate of interest. But it’s not only the rate of interest that you have to pay in a personal loan you have to pay some other changes too, like processing fees, pre-payment charges or late fees, etc. Let us discuss the pre-payment charges first.
Whenever you get a personal loan, the time to return the personal loan is decided before providing a personal loan. This is known as the tenure of the personal loan. You have to return the amount of loan to the bank with the rate of interest. But sometimes it happens that you get money to return the loan before the tenure.
Why Pre-payment Charges?
These are basically taken by the banks to compensate for the benefits that they would have had with the interest rate of the personal loan. Though you are closing your loan now so they can’t charge you the interest rate, this is the reason banks charge pre-payment charges.
There are two ways to save your pre-payment charges.
- Do research about it in all banks. You can do this online. Because there are some banks that have no pre-payment charges.
- If you know that you need a personal loan for a short interval of time then always choose the short tenure for the personal loan.
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