Introduction
Personal loans have become synonymous for most of us in everyday life. Be it buying some electric appliances, or loaning money from the bank for education, starting a business and many other causes. Personal loans are the best choice to meet your financial needs and occasional indulgences.
In recent times getting personal loans from the bank has become easy with a simplified process.
Taking a loan is not the only focus you should have; you must have to be precise in how to repay your personal loan.
Planning your repayment strategy in an organised way will not only save you valuable time, but it will improve the financial standing.
In this article I will be giving you 5 tips on how to repay your loans quickly. Read the article till the end, to understand the process and learn how to apply it properly.
How To Repay Loans Quickly | Pay Off Debt Faster?
There is always a give and take process, especially with money. Our banks help us to get the loan to get on with what we want, but it is our duty as well, to repay the money that has been given by them when we needed it the most.
- Repay Quickly with Higher Interest Rate
Keep note that meeting the eligibility criteria to get a loan means repaying it back with a higher interest rate, than home or car loans. When everyone around you advises that personal loan is necessary for financing, remember it can also become a debt trap, only if you fail to repay within the deadline.
If you happen to have a few other lower interest loans on your hand, it makes sense to repay the personal loan that comes with a much higher interest rate. You must know how to prioritise debt as it is considered to be a smart way of repaying the money quickly.
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- Give Yourself A Home Loan Top-Up
If you have already taken a home loan, then get a home loan top-up as it will cover all the unexpected expenses that you might have for home improvements. Home loans have more economical interest rates when compared to personal loans and even credit cards, if you ask.
It not only helps to consolidate your debt but also your monthly pay-out decreases. You are also servicing individual loan accounts instead of spreading out your debt across several loan platforms.
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- Get Debt Consolidation Loans
There can be times when you are struggling to repay your monthly EMIs on time, if you have several personal loans to repay as well. Make sure that you are not falling behind in your personal loan payments, and to that you should opt for a debt consolidation loan.
You can gather all your loans, that includes credit card debts as well into an entity that has a debt consolidation loan. When being opposed to make several repayments o interests rates, then this result turns out in a convenient single-pay out every month.
With the cover of debt consolidation, you will be able to pay lower interest on the monthly instalment. Which will make it easier for you eventually to manage all your finances in a better way.
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- Foreclose The Personal Loan
Personal are generally used to fulfil the short term financial deficits. But it comes with interest rate and repayment deadline of 1 to 60 months. While you were glad to meet your immediate financial requirement, remember you also have a financial burden that requires a pay back. You will have to abide by the tenure the bank provides as a deadline for repaying the entire amount with interest by a minimum of 12 month period.
The best way is to foreclose your personal loan if you happen to have enough funds to do so. This process can start as soon as your lock-in period gets over. You might have to pay a penalty charge though. Prepayment of your personal loan actually saves a lot of interests that the bank keeps adding to your entire amount. And therefore, you will have the financial burden off your shoulders soon.
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- Personal Loan Balance Transfer
If you own a credit card that has a significant spending limit or is in displeasure with your current lender then you can go for a personal loan balance transfer, as it is a mode of repaying the loan quickly. Under this facility you will have your previous outstanding balance closed. You may get a higher loan sanctioned to you with affordable interest to pay.
This all makes sense if your interest rate and credit card service provider provide you the right option to transfer it to a lower rate. This can earn you a good credit score.
Note that: never fail to miss your EMIs payment on your loan, opt for the auto debit which gets offered by lenders. Make sure that your bank has enough to manage the payment all along. If you fail the EMI payments then it will have you pay the penalty charges. You can also be a victim of bounce charges if there is a lack of sufficient funds in your account. Which will make your loan even more expensive.
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Wrapping It All Up
There you go with How to Repay Loans Quickly | Pay Off Debt Faster. I am sure this helps you to pay off debt faster. These 5 important and helpful ways should be imprinted in your mind, and start playing at the back of your head, whenever you step forward to ask for a loan.
Hope this article has helped you understand the topic completely.
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