Planning to pay off loan before time? Here is what works in your interest

Foreclosing a loan other than floating-rate home loan attracts foreclosure charges, which can range between 2 per cent and 6 per cent

Once you have decided to foreclose, make a list of all your loans along with the rate of interest you pay on them

While loans allow us to enjoy things before we have the money to pay for them, they also carry an interest cost. So, when borrowers receive a bonus or any other sort of windfall, they often think of foreclosing their loans (or paying them off before their tenure ends). This decision should be made after careful consideration of the pros and cons.  Foreclosing helps reduce financial stress. If an investment matures, or you happen to sell an asset, you may want to foreclose a loan with that money, and thereby reduce the burden of equated monthly instalments. Doing so also allows ...