Loan

Prepayment

Also known as: Part Prepayment, Foreclosure, Early Payment

Early repayment of loan principal before the scheduled tenure, either partially or fully.

Detailed Explanation

Prepayment involves paying off loan principal before the scheduled due date. Part-prepayment reduces outstanding principal and can lower EMI or tenure. Full prepayment (foreclosure) closes the loan entirely. Floating rate home loans for individuals typically have no prepayment charges, while fixed rate and personal loans may have penalties.

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Related Terms

EMI

Equated Monthly Installment - Fixed monthly payment for loans comprising principal and interest.

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