Borrowers often have dreadful stories to narrate when it comes to loan repayment. Once in their lifetime, each borrower has two or more loans running simultaneously and such borrowers receive the worst hit. The Credit card charging huge interest amount on dues can add to their financial woes.
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The question is, are there any strategies to settle multiple loans at once or to manage such scenarios without hurting the credit score? The answer is yes. Personal loan or short –term loans can help you manage such circumstances, however, availing loans should be your last option and you must try liquidating your savings to pay off your bills first. Listed below are certain scenarios when a short-term loan can prove beneficial for you.
Usually, credit card issuers charge a high-interest rate on credit card balance. The interest rate ranges from 24% to 36% per year on your credit limit. So when you have credit card bills prioritize repaying the dues on time to save finance charges. However, if you have incurred a huge debt on your credit card then you need to tackle it first without affecting the EMI payments of other loans. Credit card debts can quickly add up to a huge debt amount and thus you can opt for some convenient financial instruments to the outstanding amount on your credit card.
If the above-stated instruments are not working for you, then the best way to tackle such debts is to avail of a short-term personal loan with a cheaper interest rate. While opting for the short-term personal loans check the prepayment charges and the processing fees. Ensure you do not land yourself into more financial trouble after taking the loan.
See Also: Personal Loan in India
If you are saddled with too many loans are struggling to settle them then you first need to sit down and access how the loans can be settled within minimum time. Professional help can prove to be beneficial while dealing with such situations.
Make a list of all the loans and evaluate whether you can consolidate this debt or not. You can make significant gains if the new loan’s interest is cheaper.
If you have multiple loans running at the same time then you must keep directing your payments towards each account with utmost dedication, However, if you want to settle all the loan accounts at once then you may consider prepaying the loans by liquidating your savings. You may also use a part of your bonus or proceeds from the sale of assets to bring down your high-interest debt as much as possible.
A short term loan or a personal loan can also prove beneficial in tackling such financial situations. Most banks will also give you Loans against property and allow you to consolidate your debt. Check the charges and apply only if it reduces your total cash outflow.
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