10 May, 2025 | 17:01 IST
AI is no longer only for tech experts. Today, anyone can use tools like ChatGPT to help with everyday tasks. Whether making to-do lists or managing finances, AI can help with all. One growing use of AI is in personal money matters, including how to prepay a loan smartly.
Whether you have a home loan, personal loan, or any other loan, prepaying them can help you become debt-free faster and save big on interest. With the help of ChatGPT, you can plan it all yourself, for free and in just minutes.
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A loan prepayment plan is a strategy where you pay off part of your loan earlier than the scheduled EMI payments. This helps reduce the interest burden and sometimes even shortens the loan tenure.
Suppose you have a home loan of Rs 40 lakh with a 20-year tenure at 9% interest. In this scenario, you will end up paying over Rs 45 lakh in interest alone. If you prepay Rs 5 lakh after 2 years, you could save Rs 15-20 lakh in interest, depending on the lender and terms.
If you are just starting out or need fresh credit, Moneycontrol might help. In partnership with eight lenders, Moneycontrol offers quick, paperless personal loans up to Rs 50 lakhs. With rates starting from 10.5%, it can be a good starting point. All it takes is a few clicks.
Here are some major benefits of loan prepayment:
Step 1: Share your loan details with ChatGPT
Open ChatGPT and input your loan details.
For example - “I have a Rs 20 lakh personal loan for 5 years at 11% interest. My EMI is Rs 43,489. I want to prepay Rs 2 lakh next year. Would you be able to help me build a loan prepayment plan?”
ChatGPT will tell you how much interest you save, how much EMI changes, or whether your tenure will be reduced.
Step 2: Decide your prepayment strategy
There are generally two options when making a loan prepayment:
ChatGPT can explain both and help you decide. You can put in the prompt: “Which is better for saving more interest – reducing EMI or reducing tenure if I prepay Rs 2 lakh on my personal loan?”
It will explain which option works better for you based on your loan type and interest rate.
Step 3: Get a custom prepayment plan
You can ask ChatGPT, “Can you make a 3-year loan prepayment plan for me with a goal to close my loan early?”
ChatGPT will likely give you:
Step 4: Monthly budget planning for prepayment
The biggest challenge in prepaying loans is arranging extra funds. Here, ChatGPT can help create a budget. You can ask, “Plan a budget to save Rs 10,000 per month for my loan prepayment.”
ChatGPT will give you a monthly savings plan, cutback suggestions on expenses and emergency fund tips.
Step 5: Ask ChatGPT about bank charges or rules
Different banks have different policies. Some loans (especially older ones or business loans) may have prepayment penalties or conditions.
You can give the prompt, “Does HDFC charge a penalty for prepaying a home loan?”
ChatGPT can give you general information from trusted sources: “As per RBI rules, banks cannot charge prepayment penalty on floating rate home loans. Fixed-rate loans may still have charges. Please check with your lender.”
If you are looking for a personal loan with easy terms, Moneycontrol, in partnership with eight trusted lenders, offers personal loans up to Rs 50 lakhs. The entire process is quick and paperless. You just have to fill in your details, verify your identity, and select your repayment period. Depending on your profile, interest rates can start as low as 10.5% per annum.
You don’t need to be a financial expert to prepay a loan smartly. With tools like ChatGPT, anyone can make a prepayment plan.
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