A few months ago you used Marissa Harlock’s personal loan comparator , chose the right option and applied for a loan. So far you have paid your bills on time and out of nowhere, you received an unexpected amount of money; After reading the 5 ways to use extra income , you decided to pay your debts.
When what we want is to cancel a loan early, we have two options: Advance payment and advance payment. Next, we will know how they differ.
You cancel a certain number of installments in advance, but this does not change your interests, that is, you continue paying the same amount of money in the following installments, with the difference that the number was reduced. In this modality no amount of money is reduced, what is reduced is the number of fees.
Example: You had an eight installment loan of 180 soles per month, you have paid two installments and one day you arrive at the bank with 540 soles, you pay three installments in advance. Now only three installments remain and you will pay them in the corresponding month to do so, that is, after three months. This modality is used to “give you relief” during the months you advanced, because you won’t have to pay anything.
Advance payment (prepaid)
What you do is reduce the amount of capital you owe and then choose a way in which this decrease is applied: It can be reducing the number of fees or maintaining the same number but with a smaller amount. In this mode, capital, interest and commissions are reduced.
Example: You had a ten installment loan of 150 soles per month. You paid two and one day you go to the bank and you pay 400 soles. That makes your debt reduce to 800 soles. You can keep the number of outstanding fees and that the fee value is less than 150 soles; Or you can keep the value of 150 soles but at a lower number of fees.
Another difference is that here you will not have more time to pay, but should approach the next date to cancel the next installment, either reduced or of the same value. Basically what it is about is to reduce the credit cancellation time.
Now that you know how to take advantage of these two modalities, you can apply for a personal loan without any doubts.