The one thing that haunts a person who has taken a personal loan is the fear of not being able to clear it off on time. Here are some guidelines that help debtors become debt-free as soon as possible.
All debtors’ desire or hope to repay their personal loans availed through a bank or any financial institution in the fastest time possible. But not each of them is able to do so. Sometimes, the fault lies in the way such loan repayments are handled. Find out the facts that can lead you to become an excellent loan re-payer in no time.
Choose the Best Deal on Personal Loan
The process of developing the skills of repaying a personal loan quickly is best initiated right from the time when the loan is sanctioned. It is always better to compare the various options of banks and financial institutions offering personal loans in the market; before freezing upon one. Generally, the interest rates charged upon personal loans in India would differ by 2 to 6 % amongst lenders. If you manage to grab the lowest rates of interest, then, this would indicate that your EMI would also be the lowest. So, as a result, you can reduce the tenure for repayment as well.
Look out for No Pre-Payment Penalty
If you are planning to pay your personal loan as quickly as possible, then, this is one of the most essential moves. Normally, banks would charge you for making prepayments that are higher than the amount of your EMI. This is usually done to compensate the amount of revenue that will be lost by the bank due to less interest income. This fact might pose as a restraint while you opt for prepayment. Thus, ensure yourself that you select a lender who would not charge anything for pre payment.
Make out a Budget
If you desire to achieve financial independence, making a budget and strictly adhering to it is very essential. Adequate budget planning would allow you to assign your earnings towards your basic necessities competently. It would also provide you with an overview of your needs on the basis of which your income should be spent wisely. This way, you can deduct the unessential items from your priority list and utilize the same amount for paying off your debts faster.
Make an Emergency Fund
At times, there can be certain unforeseen events that would force you to indulge in unexpected expenses. So, there has to be an emergency fund for ensuring that during such unpredicted times, you can maintain the regularity of your EMI payments without any stress. Remember, once you miss your EMI, it would have a dual adverse impact upon your burden of interest and credit score alike.
So, even as you opt for a personal loan, make sure that you are capable enough to plan for its timely repayment or repayment before time. The above mentioned tips will surely guide you as you move forward.
Best of luck.