Tips to Pay off your personal Loan Early

Tips to Pay off your Personal Loan
Early
Breakups in relationships are definitely painful but not always. Yes, you read it
right!
A break-up will be very exciting if the relationship is between a lender and a
borrower. The breakup of such relationships is always sooner is better. The EMI to the
borrower is more or less like a stubborn girlfriend who never accepts ‘NO’ for an
answer. Not paying or lately paying EMI will cost you a lot in the form of penalties.
One must have to keep the stubborn girlfriend ( as well as EMIs) satisfied to lead a
peaceful life. One can pay off Your Personal Loans early to get rid of EMIs.
One must have to accept the fact that the personal loans are the best financial tool to
fight emergency. Same day loans are sanctioned and disbursed within a few hours
which make it best for getting urgent fund. But the other side of the coin says that the
personal loans are one of costliest credit products. With a high interest rate, the total
cost of borrowing can turn to a very big amount. An online personal loan is of course,
faster in processing than conventional loans but the rate of interest is also higher than
conventional loans. Moreover, a late payment of EMI or unable to pay can cost a high
penalty. Having seen the following points, it is always better to pay the personal loan
early which will save a lot of money and give you peace of mind.

HOW CAN WE PAY A PERSONAL LOAN EARLY?
Being Regular In EMI– A regular EMI is the basic of repaying the loan on time if
not early. One must not neglect the EMIs. When a person is regular in paying EMI he
is certain to pay off the loan on prefixed time. Neglecting EMIs not only delays being
debt free but it also brings the credit score down. Rebuilding a ruined credit score
needs dedicated working to improve it for at least a 6 to 12 months.
Keep the Tenure Shorter– A shorter tenure makes a loan repayment finish early. The
shortest tenure of a personal loan can be 12 months. A short tenure will make the EMI
amount larger. If one’s finance allows, it always better to go for a shorter tenure.
Taking a shorter tenure has other advantages like the payable interest become less.
Personal loan interest is calculated at a compound rate of interest. Hence a longer
tenure will attract a higher interest payment.
Refinance– Refinance of a loan is done when a person changes his lender in order to
get a lower interest rate or better service. If a borrower finds that the interest rate
which he is paying is more than which other lenders are offering, he can easily go for
a balance transfer (refinancing) of the loan. With a right decision on refinance, one
can bring the interest rate down. A refinance is even used to make the tenure shorter.
Along with increased income, one may afford to pay more. So one can increase the
EMI amount and repay the loan faster.
Pre-pay– Prepayment of a personal loan is the best way of getting rid of a loan at
once. One can pay the total outstanding amount and make the credit account closed if
his finance allows. If not so, one can pay a part of the outstanding principal amount
which will bring the outstanding principal amount down. So one will have less
number of EMIs to pay and the loan can be paid sooner.
Switch to Conventional Loans– Personal loans generally come in two types- Online
Loan and Conventional Loan. Online loans are best for the urgent need of money as
they are fast in nature. But they are costlier than the conventional loan. If your loan is
also an online loan then it will be better to shift to a conventional loan. The interest
rate will go down so, with the same amount of EMI, one can finish the loan faster.
Taking steps to paying off loans early is always appreciated as a good financial
decision as it saves an ample amount of money. Along with money saving, one’s
credit score is also boosted by paying off a loan before the prefixed time. When a
person has no EMIs to pay, he can invest the same amount for higher returns on
investment. Above all, the feelings of attaining financial freedom which one can get
by becoming debt free something which is beyond measures.