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What is the foreclosure payment of a loan?

The foreclosure payment, also known as prepayment or early settlement, is the lump sum amount that a borrower pays to the loan provider to close the loan account before the end of the tenure.

Foreclosure payment closes the loan immediately by clearing the entire outstanding due in one go. Some benefits of foreclosure include savings on future interest, reduction in tenure, and freedom from EMIs. Borrowers should check prepayment terms and charges and process with the loan provider before opting for foreclosure. The payment is made once the foreclosure statement with the exact amount is issued by the loan provider.