Today, you have diverse options to handle your monetary troubles and continue living a stress-free life. Taking a loan is one of those options available for almost everyone with a good credit score.
However, getting the loan seems easy when compared to its repayment. People more often take loans for various purposes, but they find it hard to repay the amount due to mismanagement of their expenses. In some cases, it results in high penalties or impounds of your property/asset kept as security.
Don't worry; we are here to let you manage your loan smartly. These tips will definitely help you in loan management and repay most of them before maturity.
Check Your Loan & Interest: You should always keep a keen eye on your loan and understand how it is bifurcated. You should take benefit from the interest rate calculator to understand the loan amount along with its interest. If you have more than one loan, it's crucial to know which among them have high interest. Note them down and find the loan principal, loan interest, and the final amount at maturity.
Repay High-Interest Loan First: Yes, it's highly recommended to start paying for a high-interest loan first. A home loan, student loans are some of the options that come with low-interest rates. Moreover, they also offer tax rebate options. So, you must know which loan has high-interest rates and doesn't provide you any third-party benefits. Start repaying such loans at priority and clear their debts quickly.
Merge Multiple Loans (If Possible): Nowadays, you have the option to merge multiple loans into one and start repaying a single amount instead of many. It is an excellent way to manage your loan amount and omit the stress of repaying multiple loans. E.g., a home loan provides you with a top-up loan sum and uses the top-up amount to repay other pending loans. This way, you can clear your debts other than home loans and continue repaying home loans without worrying about multiple deductions.
Increase Your EMI: Increasing your EMI isn't a good option if you have a static income source. For people who have a good salary hike and are getting extra wages from earlier, it's good to add the extra amount in repaying the loan. The hiked salary will help you complete the loan quicker and clear all debts. You can increase the EMI amount and decrease the tenure for fast repayment. However, you should take this step only if you are sure about a high-income source every month.
Switch Loan to New Lender: Banks and financing companies nowadays compete aggressively to create new customers and offer unmatched benefits. In this race, banks provide you low-interest rates compared to your existing ones. Hence, you should always look for such an opportunity and switch your loan to a low-interest rate. This will help you get considerable savings in the total sum.
With these tips, you can clear some of the debts faster and have a healthy amount in your account for the future. Remember, managing finances for your future is vital to stay away from sudden monetary demand.
Success Coach, Business Development Consultant, Strategist, Blogger, Traveller, Motivational Writer & Speaker