New Delhi, May 21 -- Loans are often essential during financial emergencies or major life goals such as buying a house, purchasing a car, or funding higher education. However, there may be times when your financial condition improves sooner than expected, giving you the opportunity to repay a substantial part of your loan and reduce your debt burden quickly.

Repaying a loan ahead of schedule can help cut down the total interest payable and shorten the duration of your debt. But before heading to the bank with extra funds, it is important to understand certain key details. While most borrowers are aware of penalties for delayed payments, many lenders may also charge a fee for early repayment of loans.

While the Reserve Bank of India (RBI...