Loan Payment Tips: By taking the right decision and investing, any person can easily become loan free. However, you need to work smartly. If you have also taken a loan against property, then here are five such ways, by which your loan will be repaid immediately.
Select Prepayment Method
Jairam Srisharan, Managing Director, Piramal Finance, has said that this is an important step and the borrower should look for options based on his income, fixed expenses, emergency expenses, other loans etc. If you do this then your loan will be repaid soon.
There are various ways in which prepayment of Loan Against Property can be done like lump sum payment, EMI or a combination of both. The best prepayment method should be chosen based on the borrower’s financial position and goals. Making prepayments if there is not enough amount can cause losses, while making very little prepayments does not have any significant effect on the entire loan.
Prepay less to save on interest
The borrower can reduce the overdue loan amount by making partial prepayment instead of paying a large lump sum. This means that an individual can pay extra for the Loan Against Property in addition to the regular EMI. In this way the interest payment is less and the loan is repaid quickly. However, don’t forget to check if there are prepayment charges.
Increase EMI for quick returns
Sreedharan said that another way to pay off the loan against property is by increasing the EMI amount gradually with the increase in income. In this way, the tenure of the entire loan is reduced and money is saved for interest payment.
avoid unnecessary expenses
Improving lifestyle and cutting down on unnecessary expenses, even on a small scale, can go a long way in keeping the borrower’s finances under control. Most importantly, going slow on overspending and unnecessary expenses can help borrowers pay off their home loans faster by paying higher EMIs. Apart from this, the borrower should avoid taking new loans, unless it is absolutely necessary and all other things should be kept in the letter.
Invest to prepay the loan
It may be a good idea to invest in mutual funds, stocks or other investment options that have the potential to generate returns higher than the loan interest rate. That person can make payment using this benefit.
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