With the ease at which several financing options are easily available today, you can avail of a personal loan in just a few clicks and get the money in your account almost immediately. Personal loans can help you finance your lifestyle, education, weddings, etc.
With personal loans becoming so handy, it is useful to know some hacks on saving some money on your personal loan. Here are a few:
Consolidate your Loans
If you have completed your education, are working and have a family, chances are you are sitting on a few different loans to repay. Not only can it be difficult to manage all these different liabilities but might also be more expensive.
How expensive a loan is to you depends primarily on the interest rate on the loan. Since interest rates tend to fluctuate, you may be able to consolidate all your current liabilities and convert them into a larger but cheaper liability.
Pay Off Your Loans Faster
The longer you hold on to a loan, the more interest you end up paying. So, it might be a good idea to opt for frequent payments that allow you to pay off your loans quicker.
Moreover, whenever you have the funds, try to pay off your liabilities. Think of it this way: unless you can earn a return on your savings greater than the interest rate that you pay, it is always a good idea to use idle funds to retire your liabilities.
Having said that, also consider whether money is more useful to you now or later. Always try to have some idle funds in your account for emergencies.
Auto-pay Feature
Missing out on payments on your loans or your credit cards not only affects your credit profile but also can be expensive. Banks do charge a late fee; hence, ensure to have that auto-pay feature on and never miss out on your payments. This way your lender deducts payments from your account automatically on every set date of the month.
Transfer Outstanding Balances
If your personal loan is almost paid off, it may be possible to transfer the outstanding balance on your credit card. Sometimes, it might be easier to pay off a credit card balance because of flexible payment features. As and when you are sitting on idle funds, make larger payments to clear your outstanding balance quickly.
Switch Lenders
Today, many banks and non-banking financial companies provide personal loans. The interest rates offered by these lenders also differ. So, see if you can cut down on the interest rate on your personal loan by transferring the balance on your loan to a different lender.
Use these tips to use personal loans for your benefit and don’t let them be a financial burden. Today, with technology, it has become easy to apply for a personal loan and manage all of your existing liabilities in a better and more efficient manner. Check your personal loan eligibility to apply today!