1) Keep a watch on penalties an charges:
If you decide to repay your interest amount at an earlier date, make sure to keep note of the charges being levied on you by the organization for pre – payment of dues, as in many cases, it can amount to as high as 2% of the outstanding home loan or any loan amount.
2) Sum Up:
Consolidating your debts can make their payment easier as it avoids late payment charges and unwanted interest hikes. While this may improve your credit score to a great extent, make sure to conduct adequate research before opting for the same.
3) Think short:
term on borrowings – Long – term debts can be more riskier as compared to short – term ones as they charge lower EMIs and the effective cost of borrowing increases when the tenure is long. Also, it may be difficult to control interest rate fluctuations for a long period of time.
4) Cost Cutting:
Cut down on lavish expenses and refrain from undertaking new debts. Try paying more than the required due payment as it reduces your outstanding balance and helps in repaying the loan in a quick and easy manner.
5) Respect financial hierarchy:
If you have borrowed money from various institutions, pay off the highest interest debt first while making payments of lesser amounts on the other loans.
6) Do not ignore the credit call:
Make your credit card payments on time to manage your loan portfolio smartly. While many people view credit cards as a way to finance their lavish lifestyle, it is mandatory to repay accumulating dues at the earliest, to save yourself from paying a huge amount of interest for non – payment of dues.
7) Liquidate for a rainy day:
Liquify your assets so as to maintain financial stability in the long run, so as to ease your debt burden.