In an ideal scenario, everybody in this world would have enough money to meet all his needs. Unfortunately, this statement doesn’t hold true in reality.
To fill the gap between resources and aspirations, you need to take a loan. After taking loan every borrower realizes that after paying EMI year on year, your loan is not coming towards its end.
We have put together 5 tips to bail out from this situation:
1. Opt for Higher EMI
If your financial health is good then you must go for higher EMI. Your loan tenure will be reduced & you will be ultimately paying lesser money.
2. Do Prepayment Frequently
Usually, no penalty is levied, if the borrower is doing pre-payment of the loan. In the initial years, the interest component is very high. So, if you do prepayment, you can close loan must faster than you think.
3. Remove luxuries from your budget
Many of the expenses that we do on monthly basis are far from essential. Eliminating those items from your bucket list won’t impact your quality of life much. Buy clothing and home furnishings from normal stores instead of branded one. Sell gadgets & other stuff, which are unused for long period of time. Do spend less on expensive addictions such as smoking and alcohol.
4. Balance Transfer of Loan
You can shift your loan to another lender, who is offering a lower rate of interest. Generally, a processing fee needs to paid to the new lender while filling loan application form.
5. Use Investments to Repay Loans
Some investments (Fixed Deposit, Post Office Savings, National Savings Certificate etc) usually give lower returns than existing loan interest rate. In this case, you must liquidate this investment and utilize this money for prepayment of the loan.
To sum up, you need to target principal component first. An early closure of loan will save a lot of money, which you can utilize for retirement planning, home renovations or pay off other debts
If you still have any query regarding any type of loan or loan related process, you can call us at 95120-15768 or write an email to email@example.com