Check your credit report to be sure everything is updated.
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Paying off your personal loan early can help you save money on interest and reduce your debt faster. However, you need to follow the right steps to avoid extra charges. Here’s what you should do:
Check Your Loan Agreement
Read your loan papers carefully. Some banks charge extra fees if you close the loan early. Check if you have to pay any penalty.
Look at Your Finances
Make sure you have enough money to pay off the loan without disturbing your budget. Think about your savings, other debts, and monthly expenses.
Talk to Your Lender
Call your bank or loan provider and tell them you want to close your loan. Ask them how much money you need to pay to close it completely.
Find Out the Exact Amount
Ask for a loan payoff statement. This will show you the total amount to pay, including any extra charges.
Arrange the Money
Once you know how much you need, arrange the money from your savings or other sources. Pay it before the due date to avoid extra interest.
Make the Final Payment
Follow the bank’s instructions to make the final payment. You can use online banking, a check, or another approved method.
Get a Loan Closure Certificate
After making the payment, ask for a “No Dues Certificate” or loan closure confirmation. This proves that your loan is fully paid.
Check Your Credit Report
Look at your credit report to make sure the loan is marked as “closed” or “paid in full.” This helps keep your credit score in good shape.
