We already see how people look driven to a life beyond reality without thinking of their real means in hand and look forward to becoming financially stable makes it easy to dream.
Obviously, when people start living outside their pockets, they usually overlook the consequences of living resource less. Their fancy lifestyle results in creating a superficial world around themselves. Several loans can eventually lead to living a debt trap, which they don’t really expect. Through this article, we will focus on the smartest ways to manage your loans effectively.
Use the ‘avalanche’ method.
Chart out a list of debts in relevance to their interest rates. Build up a plan to pay the EMIs with the highest interest component. While you keep paying the routine payments as per the schedule. Once the highest interest loan is paid off, start with the second highest interest rate loan.
Increase your EMIs with yearly increment
Paying more on every installment is the best way to finish your loans faster. Try to increase your EMIs every time you get an opportunity. This will eventually make it comfortable to cut off big loans in a shorter period by reducing months & years. This way you save interest money also.
Every extras must go towards loan repayment.
When you receive an unexpected windfall or money, you may feel the need to spend it on buying household chores or lifestyle items. However when you’ve a loan, its best to put that money for repayment instead of wasteful spending. A big lot of lenders allow faster payment without imposing any penalty as such.
Consolidate your debts.
Debt consolidation is one of the best ways to decrease your loan liabilities. You can always take a personal loan or a debt consolidation loan to pay off high-interest loans. This will not only save the troubles of paying multiple EMIs, but also reduce interest outflow which makes it faster to pay off the loan faster.
Convert credit card dues to EMIs.
Several credit card companies offer the option to convert their credit card dues into quick EMIs. Dividing the payment into multiple EMIs will give you required space to pay the dues over a certain period of time matching your budget. Also, the rate of interest is much lower when the dues are converted into EMIs with lower interest charged on late payments and the interest is calculated on monthly reducing balance.
Make on-time payments.
Having different loans and paying several EMIs can be floated as bad practice. To top it up, if you miss EMI payments, then it will be even worse. Develop a habit of paying all your EMIs on time & setting reminders for the remaining. Set up reminders or automatic payments from your savings bank account.
With concrete planning and these smart practices, you can effectively take care of multiple loans better. Live and enjoy a disciplined yet a debt-free life. If you’re considering debt consolidation with an instant personal loan, Apply for Home Credit India Loan & sort all your loan accounts.