As a financial expert, I can tell you what is part payment in personal loan. A part payment is a voluntary lump-sum repayment made during your personal loan tenure that exceeds the scheduled EMI. Instead of waiting for full loan repayment, you shave off a portion of the outstanding principal early. This early principal reduction translates into lower interest payable over the loan's life.
What is a Part Payment Option in Personal Loan?
It involves making a one-time payment for your loan in addition to your normal Equated Monthly Instalment. This is not the same as foreclosure, in which case you pay off your debt in full.
For instance, on a Rs 1 lakh loan at 12% p.a. over five years, the normal cost might be Rs 29,936 in interest. However, paying just Rs 3,000 extra monthly (as part payment) can save about Rs 7,943 in interest, reducing total outgo substantially.
You can instruct your lender to apply the part payment in one of two ways:
Reduce the EMI amount, maintaining the loan tenure; or
Shorten the loan tenure, keeping the EMI unchanged.
If no preference is stated, the bank usually reduces the EMI by default. I hope you understand about the part payment in personal loan.
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What is Part Payment in Personal Loan?
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2025-06-19T14:38:11+00:00 2025-06-19T14:38:12+00:00Comment
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