5 Simple Ways to Repay Your Personal Loans Quickly
Everybody wants to live a stress-free life. Nobody wants to bear unnecessary tension, especially in finances. Most people in our society belong to the middle class. They face more financial problems than others like payment of school fees, dissatisfaction with salary, regular cost-cutting due to little money, etc. Such issues are typical and do not pose a significant threat to livelihood. However, some things have become universal problems in the day-to-day life of people. An example is personal loan repayment. This article introduces personal loans, their pros and cons, and ways to repay them quickly.
What are Personal Loans?
A personal loan is a certain sum of money that a person borrows for his personal use. For example, education loans, home loans, etc. The borrower can return or repay the amount at a fixed rate.
A particular interest rate allows the lender to recover the principal and the borrower’s extra amount. That additional sum is called interest.
Personal loan repayment is generally not entitled to any mortgages. This means that the borrowers can avail the sum without any collaterals like properties or houses. This makes such loans risk-free.
It usually takes about 1-7 business days to approve a personal loan after documents are submitted. There are numerous ways to repay them, such as
- EMI (Instalments)
- Full payment
In simpler words, personal loan repayment is relatively easier than a consumer loan.
Advantages of Personal Loan Prepayment
There are various benefits of personal loans, such as
- It helps improve the borrower’s CIBIL score: This improves the financial reputation of the borrower, making it easier for him to avail of another loan afterwards.
- It is processed without collateral security: The borrower is not required to keep anything on the mortgage to repay the personal loan.
- Approval is quick and hassle-free: The process is quick and simple.
- It requires minimum document submission: Basic documents such as identity proof, address proof, bank statements, and documents related to salary need to be submitted.
- No limit on the amount: A person can avail of up to 35 lacs in personal loan.
Disadvantages
No matter how attractive it is, personal loan repayment has some cons. A few of them are listed below:
- There are high-interest rates: Rates keep getting high if debts are not paid on time.
- Borrower faces sabotage to his/her credit image: This is the opposite of a good CIBIL score. It reduces one’s chance of getting another loan from banks or financial institutions.
- Fear of penalty by the lender: The lender can recover a debt by legal means if the borrower is unable to repay the personal loan.
- Leads to stress and anxiety: Unnecessary debts interfere with day-to-day life. This leads to mental health issues such as stress and depression.
How to repay your loans?
Every problem has a solution, just like this one. Remember, it is not difficult to achieve this target if one knows the correct and quick ways of personal loans repayment. Please find the easy ways to solve this problem below.
- Mutual funds
These are the best way to repay your debts if the loan amount has reached its peak. This can be done seldom, but it is beneficial to the borrower.
Investment in mutual funds is useless if one does not take their help for personal loan repayment. One can sell liquid assets such as gold or money market funds to recover from unnecessary debt.
Mutual funds come to the rescue when one has no choice. However, please note that this method is only for emergencies. Mutual funds themselves come with a lot of risks.
So try to think twice before availing of a personal loan. One should ensure whether one can repay as personal loan repayment is quite tough.
- Savings
Savings is the most secure way of repaying personal loans. These help people who have no prior investments. Make sure you save a particular sum of money from your monthly income to repay your loan.
- Take help of debt-consolidation
It is the practice in which one takes a new loan to repay his/her existing loans. It is a great way to reduce the burden of over-debt. This method comes in helps if one has multiple debts to repay.
Collect all your loans together, such as home loans and so on, and combine them into one single loan. This single loan can be paid at the end of every month at a fixed interest rate.
- Talk to the lender
There are some loans one cannot avoid. Such loans are essential for life activities such as education loans. The tenure for such loans is generally higher as compared to the other ones.
This, in turn, increases the interest rate too. Therefore, one should try to convince the lender to decrease the repayment tenure.
This is not a difficult task as institutions generally fulfil the request of people with high CIBIL scores. One could repay the amount quickly if the tenure is less.
- A loan with a higher interest rate is crucial
If an individual borrows a sum at a higher interest rate, that particular loan becomes a priority. All other loans should then be kept aside. Focus on that particular sum.
Try to repay the instalments as quickly as possible. Ignore other loans for a while. This will enhance the quick payment of that debt.
Conclusion
One should avoid taking unnecessary loans to save oneself from debt burden in the future. Keep in mind to only avail of essential loans such as education loans, home loans, and so on. Follow the above guidelines to recover from unnecessary debts quickly. Also, please visit Piramal Finance to avail of loan facilities or read more blogs like this.