Loan repayment: You can do it much faster now; use these 5 easy steps
In the age of credit cards, easy home loans, auto loans, EMI options, and huge discounts, people nowadays are taking on more and more debt than ever before.
How to make loan repayment faster: In the age of credit cards, easy home loans, auto loans, EMI options, and huge discounts, people nowadays are taking on more and more debt than ever before. Needless to say, debt fatigue becomes a massive burden and it is very difficult to get rid of. Many a time, unplanned repayment steps and confusion on which debt is to be paid off first or emergencies become major factors that turn an individual's financial life into a virtual tragedy. Often, there are other bad habits that drive a person into trouble too, like buying unwanted products and services, looking to copy others and piling on easy credits.
All of this leads to not paying off debt on time and ending up paying higher interest rates. This also damages credit scores of such individuals. Bad or negative credit scores can even reduce your chances of getting a loan when required. Having got into such a terrible state of affairs, how can you get rid of the debt and that too fast?
Don't worry, check out these 5 easy steps that can help you get rid of your debt fast and thereby allow you to put your life back on track and a smile on your face:
Step 1. Loan repayment: Make a repayment plan
Recollect all those bills, statements and pending loan records to make a fresh repayment plan. Set up a new budget for your monthly expenditure and make a plan to repay your debts. List all your loans, amounts, paid interests, paid EMIs and penalties. Calculates the amount you have paid, and check with the pending sum.
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Step 2. Loan repayment: Take Action in Crisis Mode
If you have overburdened yourself with those unpaid, half-paid or huge credit card bills, stop using them right now. Credit cards give you a facility to spend or buy things on credit. Yes, credit cards are good for certain things, but definitely not if you overuse them. If you have become a habitual spender, surrender your credit cards and stop using them further. The theory is that if a person does not have to pay cash at the time of shopping, he\she tends to buy unwanted stuff, racking up massive bills.
Step 3. Loan repayment: Pay off the debts with high interest, first
Once you are aware of all your loans and debts, make sure you pay your loans with higher interest rates at earliest. It will release out the maximum burden, easing to get rid of remaining debts soon. The loans with higher interest rates are never a good option, avoid such loans until and unless it a necessity to have one.
Step 4. Loan repayment: Take some pain
The next step is to cut down on your expenses. Well, this can be a painful task, but it is worth going through the suffering. Make a list of your unwanted or luxury expenses. Then get rid of them. For example, use public transport more, cut down on your shopping habits, don't go for lunch and dinner at restaurants, sell some unrequired old stuff, cut down on your junk food consumption, don't throw parties and so on - idea is to stop spending on all those things that are not productive. Doing these things can help you generate an extra income every month, helping you repay your loans fast. However, we are not saying that you should cut down on your lifestyle, just make sure you are not partying or shopping on a daily, even weekly basis. In short, stop being a spendthrift.
Step 5. Loan repayment: Renegotiate the terms with creditors
Well, after all that pain, planning and practicing austerity the last thing do is to renegotiate the debt terms with your creditor. You can approach your lender (bank or loan provider) to ease your interest rates or restructure your EMI plans. Yes, it is possible to communicate your repayment plans with your lender and get a cut on interest or EMI.