5 min read
22 July 2023
A personal loan can be a very useful tool when you need money to manage your finances. Whether it is to meet a large, planned expense or to cover an emergency, a personal loan provides access to funds quickly and conveniently.
However, the responsibility of repaying the loan can sometimes feel like a burden.If you are eager to become debt-free sooner, here are some valuable tips on how to repay your personal loan early:
- Create a budget: Start by creating a comprehensive budget that outlines your income, expenses, and loan repayment amount. This will give you a clear picture of your financial standing and help you identify areas where you can cut back on spending to allocate more money towards loan repayment.
- Make part-prepayments whenever you can: Consider making extra payments whenever possible. Whether it is a bonus from work, a tax refund, or any unexpected windfall, putting that money towards your loan will significantly reduce the principal amount, which, in turn, reduces the interest you will owe over time. If you have chosen our Flexi Loan, you do not have to pay any extra charges for part-prepayments. Foreclosing the loan is also a good option to consider if you have surplus funds.
- Reduce the tenure and opt for higher EMIs: Cutting your repayment period short can lead to a higher EMI, but also a lower total interest. This option can not only help you become debt-free sooner, but you will end up paying lesser overall interest.
- Prioritise high-interest loans: If you have multiple loans, prioritise the high-interest ones first. By focusing on paying off these loans first, you will save money on high interest charges and gain a sense of accomplishment, motivating you to tackle other debts.
- Automatic payments: Setting up automatic payments ensures that you do not miss any due dates, avoiding late fees and penalties. It also helps you maintain a consistent payment schedule.
- Avoid new debt: During the repayment period, avoid taking on new debt or accumulating credit card balances. Adding more debt will only make it harder to repay your personal loan quickly.
- Consider a side hustle: Find ways to boost your income by taking on a part-time job or pursuing a side hustle. The extra income can be directly funnelled towards loan repayment, accelerating the process.
- Negotiate with lenders: Sometimes, lenders might be open to negotiation, especially if you are facing financial hardships. Speak to your lender to discuss the possibility of reducing interest rates or adjusting the repayment terms to make it more manageable for you.
- Stay committed: Lastly, repaying a personal loan early requires dedication and discipline. Stay committed to your financial goals and remind yourself regularly of the goal to repay the loan as quickly as possible.
In conclusion, repaying a personal loan quicker is achievable with the right strategies and mindset. Implementing a budget and making part-prepayments are just a few effective ways to expedite the repayment process. Remember to stay focused on your goal, be mindful in managing your finances, and avoid acquiring new debt.
