Apart from paying EMIs on time, you can plan to become debt-free before the lapse of your personal loan tenor. This will help you save a sizeable amount of money for the future. Making small changes to your financial habits will help you get to your goal quickly and comfortably.
Take a look at the steps you can implement to reduce your debt obligation with ease.
1. Organise your debts
List out all your debts along with their tenor and rate of interest. Also, write down the EMIs that you are paying as per the current outstanding amount. This will help you arrange debts from most urgent to least and in the order of the payment dates. Now, focus on paying off the highest outstanding debt as quickly as possible and then work your way down the list. Ensure that you stick to deadlines so that you can avoid adding to your outflow in the form of penalties and late fees.
2. Use income from investments
If you have investments in fixed deposits, mutual funds, or stocks, use the income from these investments to pay EMIs. This will allow you to save your income and divert it to another debt’s payment. If your income from investments is substantial, you can also use it to make part prepayments on one or more loans.
3. Consolidate your debt with a loan
You can avail of a debt consolidation loan to clear off your debt. This is beneficial if you have debts of varying tenors and rates of interest. Use a nominal interest personal loan to consolidate the data into one single payment. This will make it easier to manage and will give you ample time to clear it too. As long as you pick an instant personal loan with a flexible tenor, you will be able to do this without throwing off your budget.
Additional Read: Is your CIBIL score getting you down?
4. Get an advance on your salary
Asking for a salary advance is an interest-free way of getting extra money to tide you over. You can ask your employer to sanction you an advance as per your needs. Use this to pay off your immediate debts and see if you can set up an arrangement to carry this forward for a few months, at least. But, rely on this only as a last resort measure as the salary you will get from your company will only be a part of the total. You should be able to pay monthly utilities such as rent and electricity bills despite the advance.
Use one or all these tactics to manage your debts and pay them off without any financial stress.
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