23 Dec 2015

Pratik Bhartia

Tips to help you repay your personal loan faster

Everyone wants to pay off their debts in the quickest time possible. Here are some of the tips which can help you become debt-free quicker:

Opt for the best personal loan deal: The process of setting yourself up for quicker debt repayment starts when you are taking the loan. Ensure you go for the best deal available in the market. Compare the options available to you on RupeePower to help you with the same. Rates offered on personal loan can vary over 2-6% between lenders. Lowest rates will mean lower EMI, which in turn can help you reduce the tenure

Check for no pre-payment penalty: This is an absolute must if you aim to pay your loan faster than the tenure of the loan.Typically, banks levy charges if you make payments towards your loan which is higher than your EMI amount. They do this to make up for the revenue loss they will incur on interest income. This may act as a deterrent when pre-paying. Hence ensure that you opt for a bank that offers zero pre-payment  penalty

Use an EMI calculator: Use the flexible and easy to use EMI calculator on RupeePower to understand the shortest loan tenure that you can opt for. EMI is a factor of loan amount, interest rate and tenure. Once you have decided the loan amount and bank (hence the interest rate), you can opt for the shortest tenure based on your EMI repaying capabilities

Make a budget: Making a budget is an important part of achieving financial independence. It allows you to efficiently allocate your funds to your basic needs. Also it gives you a view of where your are spending your income, and cut out items which are splurges and use the funds towards paying the loan faster.

Create an emergency fund: Creating an emergency fund is important to ensure that you can continue to pay your regular EMI even in unforseen scenarios where you incur unexpected expenses. Missing EMIs will not only increase your interest burden, it also impacts your credit scores which will make future loans more expensive for you

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