An instant Personal Loan in India has many advantages, like simple processing, speedy disbursal, minimal documentation, etc. However, these loans are unsecured, and the interest rate is typically high, but a Personal Loan interest calculator can help you get the best interest rates. As a result of the high-interest rate, your monthly budget may be hampered by the EMIs of new and old loans (if any).
Additionally, your credit score suffers, and when you default in repayment. As a result, if you take a few wise actions, you might be able to return the loan without experiencing any difficulties or worry. Using the methods listed below, you can organise your repayment in the wisest possible way.
- Debt Snowball Method
The lowest loan is paid off first when using the snowball method, regardless of the interest rate. This reduces the total principal amount. In this approach, you repay a smaller amount to speed up the repayment gradually.
- The Stack Method
Using this strategy, you pay off the interest rate first and the principal amount last. You can speed up debt repayment in this way. Always use a Personal Loan interest calculator to ascertain your loan EMIs and find the best offers online.
Both of the loan repayment options mentioned above are practical. However, you must select the best strategy based on your financial health.
Is There Anything Else You Can Do To Make Your Repayment Easier?
There are a few additional steps borrowers can take to prevent falling into a debt trap.
#1 Never Skip An EMI
Get in touch with your loan provider and let them know in advance if you won’t be able to fulfil a monthly EMI commitment due to unforeseen circumstances. Creditors have provisions for such circumstances. However, you’ll need to pay penalties and extra interest for the days that go by without payment: if you miss an EMI. Even worse, your credit score suffers as a result.
#2 Consolidate All Debt into a Single Loan
We call it consolidating debt. You can sum up all of your repayment obligations if you have multiple loans that are still unpaid. Visit a lender and get a single instant Personal Loan in India. Try negotiating for a lower rate of interest for the loan you’re taking out for debt consolidation. Consequently, there will be just one EMI to cover. You can also accept a loan with a longer period, perhaps three to five years.
#3 Use the Debt Consolidation Loan For The Stated Purpose Only, Not Anything Else.
It is easy to be enticed and overspend when you have money in your account. But it would help if you were disciplined enough to use the loan for its intended purpose and withstand such temptations.
#4 Do Pre-Payments For Surprising Profits
If you receive a bonus or a pay increase in the future, use the extra money to pay off the loan. This will shorten the loan’s term and your financial obligations as well.
#5 Avoid Taking On Any New Debt
You shouldn’t take on any more loans till your situation gets better aka you repay the loan. No matter how good the justification, this also includes credit card debt or other Personal Loans.
#6 Be thrifty
Evaluate all of your expenses and make an effort to reduce the ones that are not necessary. This can include purchasing the trendiest gadgets for a few years and other pricey purchases that you may put off. Remember that after you get out of this financial constraint, you will have plenty of time to indulge.
Any salaried worker in the public or private sector or in the government between the ages of 22 and 58 with a monthly income of at least ₹20,000 is qualified for a Personal Loan. Minimum paperwork is required to obtain this loan: PAN card, proof of residency, salary slips, and identification documents (Aadhar card, driver’s licence, voter ID).
The aforementioned tips will assist you in reducing your loan load. Furthermore, for a stress-free repayment procedure, we recommend that you never borrow more money than you can afford to pay back. Lastly, always use a Personal Loan interest calculator to avail the best interest rates and find your loan EMIs.