Everyone who has taken a loan wishes to be debt free sooner than later. Having a certain amount of debt can make you restless and half of your life is driven by this tension. But there are some simple ways by which you can get rid of this tension. Now-a-days many banks and NBFCs prefer the borrowers paying off the loans quickly. So they do not charge any pre-payment fees. Or even those who charge it, it’s doesn’t drill a hole into your pocket as the fees starts from mere 2%*. We have come up with a few ways by which you can pre-pay your loan easily, without burning the mid night oil.
- Pay your EMI on time:
Paying your EMIs on time is the first step to repay your loan without any delay or extra charges. If you pay your EMI on or by the given monthly deadline, the bank or NBFC won’t charge you with any late extra fees. Paying EMIs on time will also give you time to make other extra savings simultaneously.
- Make apt monthly savings:
Along with the EMI, start making monthly saving of at least 5% to 10% of your salary amount. Keep this savings amount away and use it annually to pay off the loan in one bulk installment. You can save this amount via opting for a recurring account or by any other means of saving money. You can also utilize the interest rate you will get on this saved amount. These savings can bring down the principal amount drastically and paying off the loan will become easier. The tenure will also reduce automatically.
- Increase EMI amount with boost in monthly income:
Be it self employed or a salaried employee, every professional gets a boost in his or her income after a few years or months of working. You can increase the amount of EMI as you get an income hike. As the amount of EMI increases, the tenure of loan payment reduces. You can use your extra hard earned money to pay off the debt quickly.
- Pay off the loan by using bulk payments:
Every time you get an incentive or bonus, you can use it to prepay your loan. This way you can pay your loan amount in bulk. You can use your bonus or incentive amount in full or partially to make the pre-payment. This will surely bring down the rate of principal amount to be paid.
- Consolidate your debts:
Taking one loan to pay off your multiple loans is the best way to handle your debts. This will save you from paying off excessive interest rates on various loans. This way you will pay off the multiple loans, getting rid of so many extra interest rates and bring them all under one debt and one interest rate.
- Plan your finances and expenditure:
As mentioned above, you can pay off the debts by using your savings or surprise bonuses. But to do this, you need to plan your expenses. You surely don’t want to end up broke every month by struggling between paying the EMI and saving simultaneously. Every person has various household and other expenses to pay. Thus you should make a list or plan your expenditure to avoid having an empty bank account every month end. By doing this, you’ll realize how to utilize your money in the right way and can avoid unnecessary expenses.
- Get help from your spouse or co-applicant:
Many loans require a co-applicant to grant the funds. The co-applicant can be your spouse or a family member. You can take their help to pay off the loan quickly. You can club the income of your family members and convert into bulk EMI payout. You can add their income in your savings and pay off the loan quickly.
Now that you know how easy it is to pay off a loan, why don’t you apply for one?