5 tips to repay loans on time
Loans used to be a lot tougher to obtain in the olden days, but in recent years, obtaining quick loan money is a cinch. With the cost of living showing no signs of letting up, personal loans have begun to play an important role in our day-to-day lives.
Being able to afford daily necessities at the end of the month, or pay for a night out with friends, or even emergencies for which you need urgent money, is sometimes only made possible thanks to the convenience of a personal loan service that loans money almost instantaneously.
However, while it feels good to get a personal loan easily, it is just as important to pay it back on time. This helps keep your financial standing in good shape and also saves you time and money in the long run.
With that in mind, we look at 5 ways to repay loans on time.
As we have discussed, we usually need personal loans to pay for debts that are short-term in nature. However, repayment of these loans is a long-term process, as you have to pay back the principal amount with the interest levied on it, over a 12-month period (and sometimes up to 60 months).
If you don’t want to have this hanging over you and possess the necessary savings in your kitty, you can get out of it by foreclosing your personal loan. Note that this only is possible once your loan’s lock-in period is over, and also, you will have to pay a penalty charge.
Regardless, it’s still cheaper in the long run, compared to paying the full interest over the originally stipulated tenure, and it eases your financial pressure.
Consider a part-time job
A lot of students work a part-time job in order to pull off their education loan repayment. This allows you to get an early start on the road towards settling your debt. While it can be stressful to juggle your studies and work, it’s worth considering if don’t see yourself coming into the kind of finances that you would need to foreclose.
You can also go one better and invest the money you earn from your part-time job and then pay off the loan upon finishing your course, with the cumulative sum derived upon investment maturity.
Prioritize from high to low
It’s important to keep in mind that the interest rate of a personal loan is higher than loans for a home or vehicle, for example. As a result, you could dig yourself into a hole if you let them pile up.
So, while you may have a bunch of loans on your plate, make sure to prioritize the personal loan repayment. Doing so will also ensure you pay it off faster.
Another alternative for those with too many loans on their plate is to consider debt consolidation. With so many loans to repay, managing them could get out of hand as the interest rates stack up, making it an uphill task to even pay off your monthly EMIs on schedule.
Debt consolidation allows you to consolidate all your loans into a single entity, altogether removing the headache of paying off multiple loans on varying interest rates. You can make a single payment every month, at a fixed rate of interest. Not only that, when you go for a debt consolidation loan, you’ll end up paying a lower interest rate, thus easing the burden of managing your finances.
Personal Loan Balance Transfer
Just like debt consolidation, another alternative which you can avail is a personal loan balance transfer. Say you are not entirely satisfied with your existing lender or your existing credit limit is too low, a personal loan balance transfer offers a quick out for you.
Put simply, it’s a process where you transfer your entire outstanding personal loan from one bank to another, and the new bank extends a lower interest rate on the outstanding loan amount.
Do keep in mind, however, that you need to have a good credit score to avail a personal loan balance transfer.
A good credit score is just one of the many benefits of timely repayments when you take an instant loan from mPokket. We have always encouraged responsible borrowing and to that end, we offer incentives such as mCoins and higher borrowing limits.
Simply download and install the mPokket app from Google Play Store, register with a handful of documents, and avail of instant loans up to Rs. 20,000 directly into your bank or Paytm account.