Loans prior to 1999 were only taken when in dire need or for an emergency. Today, loans have become the way of life. Loans are easily available and many Banks/NBFC are giving people loans with attractive rates of interest. People take loans for as small a reason as buying a new expensive Smartphone.
Hence we end up taking these loans and the debt keeps piling up. It’s not good to pile up such debt as it affects our financial health. Hence you need to carefully plan your debt and how to repay it quickly. There are few reasons why it is best to pay off your loan quickly;
Peace of Mind:
You might have heard from your family and friends that it’s best to pay off your personal loan quickly. But before you could jump on that thought, you need to carefully plan and accordingly pay off your debt. Doing it in a systematic manner helps you maintain a good credit score and also achieve peace of mind.
Your credit score is one of the most deciding factors in getting any type of a loan in the future whether it is a personal loan, car refinance loan, home loan, business loan or even a loan against property. Hence paying your EMI’s on time will always give you a good benefit. This can also be strengthened by the use of a credit card. Using it in limit for a while will increase your credit score and you will be able to get good rates of interest from the banks for any future loans.
Once you pay off your loans, you are debt free. That also means that the money which was being used off in paying personal loan can now be used to invest in other options. This can help you increase your wealth and also set up a corpus fund for future emergencies.