New Delhi, Aug. 24 -- Paying off a personal loan before its scheduled term can reduce the interest burden and free up monthly cash flow. However, prepaying a personal loan may not always be the best financial move.

Borrowers juggling personal loans must weigh the interest and overall cost savings they will achieve against foreclosure costs, and also consider how their emergency funds will be affected once the personal loan is repaid before its scheduled tenure ends.

Personal loan prepayment means repaying all or some of the outstanding loan before the original repayment tenure ends. The borrower, i.e., the holder of the personal loan, can either make a partial prepayment to reduce the outstanding principal or foreclose the loan by payin...