Loans are a fantastic solution for all your urgent financial needs. However, once you get the loan, it is crucial to have a well-thought-out repayment schedule in place. It is very important to plan your repayment strategy beforehand to ensure that they are not straining your monthly finances. Here are some tips and tricks to pay back your ₹3 Lakh personal loan wisely and close the loan efficiently.
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Identify Your Finances
Before setting out on a journey to create a good repayment strategy, it is important to first gauge your own monetary requirements. Analyse your income, regular expenses, and investments. Make sure to take into account the other liabilities you need to repay alongside the ₹3 Lakh personal loan. Being aware of your financial situation and prioritising your requirements is the first step to a great repayment strategy.
Plan Your Budget
Now that you have understood your finances and are ready to take the next step, it’s time to start planning. Reduce expenses where you can and direct more of your income towards the repayment of your loan. This ensures that your loan gets repaid faster, allowing you to close the loan account prior to the end of the tenure. Think at a cellular level and manage your finances well to be able to save up more on everyday expenses and repay your ₹3 Lakh loan easily.
Prepay Your Debt
In case you receive a lump sum amount as a bonus or as a yield of your matured life insurance policy, direct it towards the repayment of your loan. Lenders will charge you a minimal fee for making such lumpsum payments during your loan tenure. However, these payments can help ease the EMI and even shorten your repayment period, allowing you to become debt-free faster and quite easily. You can also opt for foreclosure if you have enough money to repay the entire loan amount in a single instalment and close your debt.
Manage Your EMIs
In case you just got promoted and your income has hiked considerably, you can choose to increase your monthly instalments. This helps you repay your loan faster while not putting any extra strain on your finances. You may also choose to start a new side hustle to get additional income, which you can direct towards the repayment of your ₹3 Lakhs personal loan. While this will require you to put in more effort and hours of work, it will surely help you close your loan faster.
Use Your Investments
When your loan has started becoming a burden on your monthly finances, it is advisable to use your savings to repay it. If you have invested your funds in high-yield plans like a ULIP, fixed deposit, or a mutual fund, liquidate them to repay your loan. While this does reduce your savings, it helps you become debt-free sooner. You should opt for this option only if the ₹3 Lakh debt is having a considerable impact on your finances. This is because using your existing investments for loan repayment affects your monetary situation and reduces the number of easily liquefiable assets in your possession. This may lead to a shortage of funds in case of any emergency which may arise in the near future. Thus, it is advisable to plan your finances prior to opting for this option.
Transfer Your Balance
It may happen that in case of an emergency you applied for an instant personal loan online. However, at that moment, you failed to check and compare the terms of your loan and are now paying interest, which is a huge burden on your finances. In such a scenario, opt for a balance transfer. If researched well, you can lower the interest rate charged on your existing ₹3 Lakh Loan, reducing your EMIs and the overall cost of your loan. When opting for this option make sure to take into consideration the costs associated with the transfer and calculate the total expense. This helps ensure that you do not lose out on more money with a transfer than you would if you continued with your existing lender.
Consult Your Financial Advisor
When facing a financial problem, it is important to discuss the matter with your financial advisor. The expertise of the professional can help you gain a better understanding and fresh perspective to solve the problem. Take the advice of the advisor and manage your finances accordingly to repay your ₹3 Lakh loan in a hassle-free manner. Such consultations help you solve present issues and guide you towards maintaining your financial health, helping you avoid any monetary problems in the future.
Your repayment strategy depends on your income, expenses, liabilities, assets, and priorities. Familiarise yourself with these aspects of your finances and plan your repayments accordingly. Close your ₹3 Lakhs personal loan easily by sticking to your strategy and getting the right guidance from a financial advisor. Use the tips discussed above and become debt-free before the end of your loan tenure.