Defaults in personal loan payment
can result in a drop of credit score and affect future credit possibilities. Therefore, it is crucial to smartly manage them and other debts.
1. Stick to a budget:Create a budget before you opt for a personal loan. Ensure you have enough funds to smoothly make your personal loan payment and not affect your normal expenditures. Taking on another debt without due research can overburden your finances and result in default of payments and hamper your credit score.
2. Keep an eye on expenses:Although this is part of point 1 while making your personal loan payment, keep a tab on your expenses every month. This will help in identifying expenses which are unnecessary and can be cut down, hence look out for them. For example, while you make a budget, look for expenses that have gone overboard and can be brought down.
3. Calculate the total debt:Although this must be done before applying for a personal loan, calculating the total debt to understand whether or not you will be able to make the personal loan payment smoothly is necessary. Moreover, this step will help in understanding how quickly you can repay the loan. A personal loan calculator can identify the monthly amount to be set aside for this.
4. Make timely payments:As mentioned above, a default in your personal loan payment can affect your credit score adversely and affect your future credit possibilities. Therefore, it is important to make timely payments. If you are someone who tends to forget dates, it is better if you set reminders or automate your payments.
5. Keep loan repayment as a priority:The best way to never miss any personal loan payment
is to keep loan repayment as a priority. Make a rule to make the payments in full every month until you repay the loan.
6. Opt for a personal loan balance transfer or debt consolidation:If you are managing several credit card payments or small and big loans together, one of the ways to manage your personal loan payment is by opting for debt consolidation. This not only helps in saving thousands on interest cost but eases the process of repayment.
Check your loan eligibility here.
The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
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