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Frank
March 25, 2020
Advance payment in a personal loan.
If I pay in advance, i will pay less interest?
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Kreditiweb
Asesor financiero
March 25, 2020
Kreditiweb
Asesor financiero
March 25, 2020

Hello Frank,
Getting rid of debt fast is always recommended. Sometimes it can slightly drop your credit score but nothing like the psychological benefit of feeling financially stress free. Even though paying off loans early isn’t always the optimal strategy, it’s never a horrible one. Those few points that you can drop - if you actually do - can be recovered fast.
To decide what’s best in your case, evaluate how you benefit from debt, and compare those benefits to the cost of keeping loans in place. You usually save money when you eliminate debt early, but you might have valid reasons for taking an alternative approach.
However, this doesn't mean you are paying less interests, but you are getting rid of the debt faster. To your questions, paying off debt earlier does not mean to pay less interests! There are no discounts for that.
But we recommend you to pay your loan earlier either way, so you avoid further inconvenients on repayment in case you end up in a hard financial situation.
Exceptionally, some entities will charge you a small fee for prepayment. This is not a common thing when we are talking about personal loans but you can make sure about it by contacting your loan issuer.
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