It’s becoming more difficult to afford the stuff we want as interest rates rise and the economy fluctuates. While borrowing money from others is an option, there are also other fast finance options available, such as personal loans and top-up loans.
Taking out a personal loan is a convenient and fast way to get money. However, you should be aware of the tenor, as debt accumulates the longer you take to repay. And if you take out a top-up loan, you must be certain of your income and willingness to repay it. Ideally, your EMIs do not exceed 40% of your gross income.
Many people take out loans even though their income is low, putting them in a difficult position when it comes to repaying what they’ve borrowed. Here are few pointers to help you escape a situation like this.
- Pre-pay is the smart key: Prepayment refers to making a higher payment against the loan. This will help you shorten the loan’s term as well as the amount you owe the financial institution in principal. As a result, if you have any spare or unused cash, it’s a good idea to put it toward paying off the loan.
- Get loans with shorter tenor: The tenor of a loan varies depending on the lender and the scheme. You would be able to handle your money more effectively if you choose a short tenor for your loan. This means you’ll have to pay less EMIs and you’ll be free of repayment burden faster. Long-term loans extend payments, and a long term may have a negative impact on your income and savings. Choosing a short tenor, on the other hand, does not imply that you will be financially stressed beyond your ability.
- Do not delay EMI payments: Your principal will be repaid quicker if you make regular and prompt EMI payments. The EMIs will pile up if you do not keep up with your payments on a regular basis. Delaying EMIs will lower your credit score, making it more difficult to obtain another loan in the future.
- Avoid over borrowing: Do not take on more debt than you can afford to repay. This includes, among other things, looking at your fixed expenditures, tracking your monthly spending over the last year or two, and considering your job security. Over borrowing will result in you paying interest on money you didn’t need.
- Read terms & conditions carefully: Perform a thorough review of the interest rates, monthly EMIs, and terms and conditions before taking out a personal or top-up loan. Get a loan only if you are certain that you have the financial means to pay the EMIs on time, with some money left over for any unexpected expenses.
BOTTOM LINE
With these considerations in mind, you can never go wrong with any kind of loan, not just personal loans. Personal loans with low interest rates are available from us. You may also look at their pre-approved deals on personal loans, home loans, EMI financing on a variety of items, and other financial services. This not only makes the process of obtaining financing easier, but it also saves you time.
