HOW TO PAY LESS WHEN YOU GET A LOAN
In today’s world, in order to make you feel secure, it has become highly important that you must have enough saving to enjoy your life. Half our living, almost goes into planning, investing and saving. Hardly, there are a few who live their life to the fullest without any worry.
To meet our personal needs, there’s always, we need to earn enough money to fulfill all our desires. Sometimes, there comes a situation when we fail to pay for the assets we buy and look for a helping hand to make us get what we want at the time of need.
In such conditions, what if, you get a little financial push in the back? Well, there is nothing better than this and it definitely works as a wonder and gives us a support to get the things we want.
Aren’t you finding it interesting? Yes of course! Today, it’s no longer harder, to get the things you desire by getting help from the banks you are having an account with. If you are a new customer to the bank, then it is imperative to open an account to commence the process .
In present times, getting a bank loan is convenient, quick and easy. You just need to realize your dreams with the trustee bank to get the loans approved with the low-interest rates.
Whenever, we plan to get a loan, the first thing that strikes our mind is how to repay a smaller amount, at the times of returning a debt.
Wondering ‘How To Pay Less When You Get A Loan’? This is the only question that makes us do a lot of research to get the most effective solution, before you apply for the loan. There is no lack of options to move or repay your loans early. With easy tools and options, you can compare the costs and can save maximum on the cost of your loan. Banks always provide flexible repayment options to win the trust of the customers moreover, to build long-term relations. Bank loans are of many types and it depends on your needs, what kind of loan you are looking for. Here are listed more great loan offers if you have low credit score.
Take a look at the points to get familiar with the ways to reduce your loan with the extra payments:
PREPAYMENT OF LOANS WITH SAVINGS
Taking loans from banks and repaying it, is one of the challenging tasks, which always involves great efforts and time to get all done in the best possible manner. Repaying your most important and expensive loan debts must be your first priority and it can be made easier by repaying your loans using your saving amount. It’s often we find that we rarely earn more on our savings, but always pay more on our borrowings.
Though saving is the most important part of the life to survive, however, to live a life free from worries, it is all the more important to pay off your debts before you start planning to save. If the amount of the loan to be paid is done in full, moreover, early in the tenure of the loan, then it lets you save a lot on the interest.
Let’s take an example here.
Suppose you borrow a personal loan from the bank for Rs. 2 lakh. The interest rate charged at that point is 15% for a time period of five years. Then, the installments will be paid as Rs. 4758. The amount what the customer will pay at the end of the first year it would have paid Rs. 29,039 towards premium and Rs. 28,057 as interest. But, what if the customer decides to prepay the complete amount at the present, then it will Rs. 57,422 that he stands to pay less as an interest.
At any point of your tenure, whenever you feel that you are having sufficient amount to prepay a loan, then make the payment immediately to get the burden reduced.
PART PAYMENT OF LOANS
When can you go for the part payment options? Well, it is the time when you are not having idle money that is equivalent to the full principal outstanding loan amount. The whole process of part payment works in a way and it brings down the actual amount along with your EMIs moreover, the total interest you pay also gets reduced.
It will work only when you make an amount of lump sum money a part payment. The process of paying less with the part-payment option works in a simple manner. On the date and the month of making the partial payment, the part-payment amount will be directly deducted from the principal outstanding. This will help you save down on your interest amount.
Let’s take an example to get a clear idea.
Here, you have applied for Rs. 3 lakh loan for a tenure of five years at the interest rate of 15%. In this case, you have to pay an extra interest of Rs 1, 28,219. But, if you will go for the part payment option and make a nominal partial payment after 6th EMI i.e Rs 50,000/. By doing so, you can save up to 32% of your interest portion.
The major benefit of using the part payment method is that it can be done more than once as well as for the regular payment of lump sum amount.
· REDUCE THE TERM LOAN TO SAVE MORE
Here, from the chart we can see that how you can save more in interest by simply opting for a shorter term. At first this will increase your monthly repayment but, will enable you to save more on the amount of interest whilst paying back your loan before the completion of the tenure. In order to do so, make-up your mind because it will cause you to make higher repayment.
Hence, we can say, though it’s not so difficult today to apply for loans, as there are a number of banks today to cater your needs. However, one should always take care of the loan repayment policies and procedures to take the advantage of foregoing less on interest. The aforementioned methods offer you the surest and effective way to pay off the debt before the option for low-interest rate runs out.
It is well-said, ‘Borrow as little as possible and Repay as quickly as possible’. Therefore, always try to figure out ways using which you can save your every single penny at the times you repay loans.