Is It Good to Pay Off Loans Early? Here's What Neha Nagar Has to Say

Thinking about paying off a loan early? Lots of people take out long-term loans to make their monthly EMI smaller, expecting to pay off the loan when they have more money. But here's the twist- banks aren't going to make it easy.

Neha Nagar, a well-known finance influencer, with a talent for breaking down difficult financial concepts into simple and easy ways, shares the most important and confusing topic of repaying loans early. With simple facts, she explains how repaying a loan early can result in financial loss. But how? Let's understand with an example and key points. 

Is It Good to Pay Off Loans Early?

Suppose you borrowed a Rs.10 lakhs loan from the bank, with 9% interest over 7 years and your monthly EMI becomes Rs.16089. 

Now, let's say you decide to pay it off after just 4 years. The total you'd have to pay? A whopping Rs. 12,78,229!

Here's the breakdown: Rs. 7,72,272 for your 4 years of payments (RS.16,089 * 48), plus Rs. 5,05,957 for the rest of the loan. 

But here's the kicker: If you had taken a 4-year loan from the start, you'd only have to pay Rs. 11,94,480. That's a big difference of Rs. 84,749, plus you'd have to pay extra charges for closing the loan early, adding up to almost Rs.1 lakh in losses!

Why is there such a big difference? Because in the beginning, most of your payments go towards paying interest, making sure the bank doesn't lose out if you pay early. 

So, when you're taking out a loan, make sure you choose a term that you can handle without getting stuck with extra costs later on. 

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A post shared by Neha Nagar | Filmy Finance (@iamnehanagar)

Neha Nagar's deep insights offer you a fresh point of view on repaying loans early. Her important highlight (repaying the loan early) helps lots of people to identify the better choice while thinking about repaying the loan early. Through simple explanations and easy ways to teach about finance, she resonates with her viewers. With this information, she encourages her audience to proceed toward loan repayment with more understanding and make decisions that truly benefit their financial well-being.