Finest Ways To Cut Off Loans Without Affecting Your Income
Let me take you to my story. Before booking my luxurious flat in Mumbai, I made out a plan to repay the home loan.” Repayment of the monthly payment was my top priority. I started planning for the EMI before the loan was approved”. The property was under construction for 18 months so I planned my 18 months accordingly. I knew my income, savings, and my EMIs amount so I started saving more and changed my lifestyle for that 18 months and I saved enough funds to cover my EMIs for 15 months. For calculating my EMI and planning my loans, I find better ways. Instead of involving in too many complex calculations and manege my loan in the diary, I used the app to save more time, so I can focus more on my financial goal.
As far as I have seen, other borrowers’ typical stories are that taking a loan has become a nightmare for them. At present, my father still believes taking a loan is a bad option but structuring your financial plan in such a way that you get what you desire most. I am here to tell you the finest ways to cut off loans without affecting your income.
Repay High-interest Rate Loans First
This is an important step to take, make a list of multiple loans. Place a loan at the top which has a high-interest rate and then identify which one is drowning most. Payout the maximum amount we can afford against a high-cost loan, once we have cleared the costly debt, move to the next costly loan. This technique is called’ Debt Avalanche’. This helps to reduce our interest burden going forward.
Some might be thinking of repaying the smallest loan first and then moving to the next smallest loan. This technique is ‘Debt Snowball’, it helps ease some pressure because the number of loans gets reduced, but it would not lower total debt faster. Rather, It will keep in debt for a longer time compared with the avalanche approach.
Therefore to find which loan cost me more, I used the loan calculator app. There are many out there. I used a financial loan calculator, where I get to know which loan has more interest and how could i reduce the interest with pre-payment of a small amount.
Increase Repayment With An Increase In Income
This is the best way to cut off loans quickly by increasing EMI every year. Whenever additional money flows in, our priority should be given to the repayment of loans. By this, we will end up paying our EMI early and that much money we will not spend on another item, so it is a good idea to clear debt quickly. If we are getting raised 10% every year then increase EMI by 5% every year. This means that a loan of tenure of 10 years will end up paying the loan quickly. These will save our cost of interest and at the same time end up clearing burden in real quick time. These can be calculated by Financial Loan Calculator as it is flexible to calculate as per your requirement, for example over here we have to fix the principal amount and interest rate and find tenure with changing EMIs every year. This will show how quickly can pay it off.
Use Extra Income To Repay Costly Debt
Here extra income refers to our big bonus, shares dividend, income tax refund, maturity of insurance policies, etc there can be many. Use this income to repay personal loans or credit card bills and avoid purchasing new gadgets till your financial health gets fitter. For some years, let’s tight our hands in buying expensive items till our finances become strong.
Consolidate Your Loans
It is hard to keep track of record loans and also find difficult to see which loan has a higher interest rate this all can be easily possible through Financial Loan Calculator. Now what we can do is sum up all our loans amount and convert them into a single loan amount, this will benefit us in getting a lower interest rate and then paying the existing interest rate. Other than the interest rate we will not have to track and manage multiple loans. For example, if we have multiple higher amounts of credit card bills then we can approach the lender for a personal loan for the total amount of bills and pay to the financial institutions because credit card companies charge higher interest rates and the personal loans will be avail at a low-interest rate.
Change Your Lifestyle
The best thing we can do first is Acceptance of our lifestyle that we need to have control over it. Make some adjustments in our lives and ensure that we have enough money to pay our monthly installments. Talk to ourselves about our situation and ask ourselves what we need to do and what not. This means having control over luxuries and unwanted expenses. Plan our lifestyle in such a manner that we can also live a luxurious life and also we can pay our EMIs at the end. For example, if we go to a movie and dine out frequently in a month then reduce it to a once or twice. If we have planned a vacation or renovation of our home then it can wait. The more we accept the situation more we will be able to live our lives freely.
Lastly do not hesitate to take advice or help. I have always come up with situations like this and I got the solutions from Financial Loan Calculator in form of calculation of EMI, detailed information of monthly payment in tabular form, able to compare the loans institution wise, able to keep a record of loans. And there are other institutions also that can guide you free of costs like Credit vidya and Credit Sudhaar, these institutions are actively involved with borrowers who are in trouble in paying a monthly payment.
Also Read: 5 Tips to Calculate Business Loan Repayments
This is pure management of life that everyone should know to make life smooth and sweet. If we manage to learn these points and do calculations in Financial Loan Calculator we will be able to live our life freely without any nightmares that common borrowers have during the daytime also, we don’t have to be common now after reading these articles now we have transformed into smart borrowers. And keep smiling in any situation.
Pranab Bhandari is an Editor of the Financial Blog “Financebuzz”. Apart from writing informative financial articles for his blog, he is a regular contributor to many national and international publications namely Tweak Your Biz, Growth Rocks ETC.
