Modes to repay a Personal Loan
Personal loans have many benefits, and they come with no end-use restrictions such as planning a vacation, purchasing an expensive gadget, getting your house renovated, meeting medical emergencies, etc. So it is a straightforward way to finance your needs for funds or even occasional necessity for money.
We already know that personal loans have several benefits, including the personal-loan services available for every borrower. Still, along with that, there are other benefits, such as options for the modes of repayment of the personal loan. Choosing the right repayment option saves not only your time but also improves your financial scores. In addition to this getting a personal loan sanctioned has become a very simplified process as now it is available that borrowers can even apply for a personal loan online.
These options are as given as below:
Foreclosing your loan:
Personal loans are known to cater short term requirements for funds. Therefore, when you can meet your financial requirements, you are burdened with paying back the loan amount. However, if you can pay back your loan amount
, you will still have to bear the interest rates for the rest of the tenure, so in such a case, foreclosure of your loan will be a suitable option. This could be done as soon as the loan you have availed of gets over as soon as the lock-in period you have availed of. It might cost you a minor penalty charge, but you will be relieved with the lessened amount of interest and the less burden you will be carrying on your shoulders.
Repay quickly on a higher interest rate:
Getting a personal loan is an effortless task and comes with many benefits. Still, personal loans give a higher rate of interest if we compare them with any other loan, and paying high amounts each month can lead you to a debt trap if you are unable to manage your expenses. So, you should prioritize paying back your loan amount first to get relieved from this stress; by prioritizing your loan, you will be sure that you pay back the personal loan without any faults. This will ensure that you don't get into any debt traps.
Go in for debt consolidation loans:
It is the most common way that borrowers choose. If you have a lot of debts piled up to repay with several interest rate amounts. Then you can choose a personal loan for debt consolidation as it means combining several loans into a single loan which has a single monthly payment and the rate of interest associated with this loan is also significantly less plus you get the relaxation of making a single payment every month rather than several payments of various loans. It becomes easier for you to manage your monthly expenses.
Personal loan balance transfer:
If you possess a credit card with a critical spending barrier or are annoyed with your current bank or lender, you can simply choose to go for a personal loan balance transfer mode to repay it more quickly. Under this facility, your prior outstanding balance is entirely shut down. In addition to this, you might get an increased loan amount authorized at a better accessible interest rate. This will be a better option if you are paying higher interest rates, but this is only possible if you have a good credit score. A person should never miss out on paying their monthly installments; any delay in payment of EMI can lead to penalty charges, which will make your loan amount more expensive.
These are some of the ways of making repayment of personal loans. You can also choose to use the personal loan calculator HDFC Bank to get a better idea about your monthly payments so that you don't miss out on the evaluation part where you can compare the monthly payments and your usual expenses and then check if you can manage to pay these expenses every month along with the principal amount. By checking your monthly payments you can easily calculate the amount that you will be paying and this can help you in managing your monthly expenses.
Also read this: Prepayment Option or Repayment option: A better option in Personal Loan