Should You Close Your Personal Loan Early? Here's When It Makes Sense

• Early repayment is most beneficial during the initial stages of the loan term due to a larger interest component in early EMIs.
• Consider early closure if your personal loan has a high interest rate (e.g., 13-16%) to reduce costly financial obligations.
• Ensure the interest saved outweighs any foreclosure or prepayment charges, which typically range from 2-5% of the remaining balance.
• Only prepay if you have an adequate emergency fund; avoid depleting savings, as maintaining liquidity is crucial.
• Early repayment can improve your debt-to-income ratio, which is advantageous if you plan to apply for another significant loan like a home loan.