New Delhi, July 15 -- Part-payment and pre-payment are phrases commonly employed by borrowers in a similar fashion to trim down their loan period or to lessen their interest payments. While they sound similar, they both have different perks and have different financial goals. It is important to understand the distinction to best undergo your personal loan process.

Part-payment is when you apply a large lump sum to your outstanding loan balance, in excess of what your regular EMI would incur on the loan, but not enough to fully pay it off. The principal will go down, while the loan is still active.Rohit Garg, CEO and Co-Founder, Olyv, explains the critical terms of personal loan, "Part-payment allows you to reduce your loan burden gradual...