Pre-payment option is the one to select for the loan, know these things first, lest you get harmed

Many times we are not able to meet our needs with our income. In such a situation, a personal loan proves to be very beneficial for us. Many people across the country have personal loans. In-home loans, auto loans, etc. the customer has to pay more interest. On the other hand, if you take a personal loan and do not want to pay interest, then you can also choose the option of pre-payment.
If you choose the pre-payment option, then there are advantages and disadvantages behind it. Come, let us know which of these two options is better. With this, when is loan prepayment beneficial?
If you have taken a personal loan and repay the loan before the end of the tenure, banks charge pre-closure charges from the customer. Pre-closure charges are charged at the rate of 1 to 5 percent of the outstanding loan amount. Whenever you select the pre-payment option of the loan, you have to pay a charge for the same. If the outstanding amount of your loan is high, then this option will prove to be very beneficial for you.
If you select the option of pre-payment in the personal loan, then it has a direct impact on the credit score. If you want to improve your credit score, then you should pay the EMI of the loan on time every month. Along with this, pre-closure also helps in improving your credit score. If your loan liability reduces, then it will be easier for you to get a new loan.
If you select the option of pre-payment of the loan, then you will be benefited and the loss depends on when you select the option of pre-payment of the loan. If you have repaid a major portion of your loan, then you will not get the benefit of the pre-payment option. Till now you have paid a lot of interest, along with this you will also have to pay pre-closure charges. If you have not repaid half the loan, then you should select the pre-payment option. This option will benefit you then.