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HOW TO CUT DOWN ON YOUR DEBT BURDEN WISELY?


Undoubtedly, loans are one of the most important things to make your life better. Most of us have availed it to tide over the financial crunch that we face from time to time throughout our lives. However, loans can also prove to be a burden sometimes as they need to be paid back with interest and in a fixed repayment period.

When you "Apply For Loan" you would have to know all the terms and total cost of the loan because if you manage it properly, you can efficiently cut down on your debt burden and lead a stress-free life. In this blog post, you will find some of the ways which are listed below to reduce your debt burden smartly.

Choose an affordable EMI: In case a borrower fails to repay the monthly installments then his/her CIBIL gets affected negatively which can soil their credit history and jeopardizes his chances of borrowing in future.

Therefore, it is important to choose a size of affordable EMI that can be repaid easily. If anyone would have to know about the EMI he/she have to pay for the loan amount can use online EMI calculator to seek the assistance whether they can afford it or not.

Use extra income to make larger payments: If your income increases by the means of tax refunds, incentives or bonuses from the company, you are advised to increase your monthly installments as well. It will ensure you to clear your loan earlier and devote your funds in other investments. If you have multiple loans over head then try to repay the loan with high interest first.

Refinancing is a great option: Refinancing will not only reduce the interest rate but also cut down on your loan burden. It would be a great option for the borrowers who have taken the loan on high interest rate in unfavorable conditions because refinancing helps you to get a new loan to pay the existing loan at better conditions. 

For refinancing, one has to apply for balance transfer with new or existing lender and they will pay your previous loan and new loan gets activated at affordable interest rate.

Opt for pre-payment or part-payment: This option will help the borrower to pay off the loan amount before fixed tenure. It lessens the outstanding quantum and reduces the EMIs. It is important to ask the lender beforehand whether they have the facility of pre-payment and part-payment or not.

Use existing investments to repay debt: One can avail loan against investments such as insurance policy, PPF etc. to repay the loan. The maximum loan money availed from the investment can be 25% of the balance and the rate of interest levied on borrowing is 2% more than the prevalent rate on investment.

Thus, if one follows the above listed tips after they "Apply For Loan Online" or offline then there should be no doubt that he/she would be capable to pay their loan without any stress on time and there would be nothing like debt burden in their life.


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