How do you handle your loan? | Economy

Under the constant pressure of life, many people are forced to apply for large loans to pay for various living expenses, such as children's school and college fees, or to buy an apartment or a car, or just to pay for the high daily living expenses. Inflation is rising year by year, Salary comes at the end of the month, until you find it flying in to pay off the various loans and debts you owe.

Paying off these debts can take many years, during which time you will be forced to live minimally, suffering from the stress of want, poverty, and poverty.

Perhaps the question that arises is: How do we deal with these loans smartly to make them less burdensome?

In this report, Al Jazeera proposes 6 smart ways to handle your loans and manage them in an efficient manner, ultimately enabling you to get rid of them in the fastest time and in the best way, according to some Professional websites and platforms such as Forbes, Money Tap, Economic Times, etc.

loan debt money debt
The first step to solving your financial problems is properly understanding your loans and debt (Getty)

Know your loan

The first and most important step is to properly understand your loans and debts. Contrary to expectations, many people who are heavily in debt and taking out one loan after another do not know their debt due dates, interest, installments, repayment dates, other benefits arising from late repayments, and other necessary matters. She has a sound, scientific approach to her knowledge of debt management.

Remember that awareness solves half the problem, here we recommend that you write down the details of all the loans owed to you in a special “Excel” file, for example, and specify in it the amount of each loan, what is The interest rate on each loan, the monthly installments on each loan, how much you pay, and how much is left. When will it end?

This will help you understand which of your loans are the most expensive and which are the smallest and cheapest, giving you a complete and accurate picture of your debts and how to deal with them. This leads us to delve deeper into how to repay and deal with these debts once we have an accurate understanding of them.

Pay off debt the snowballing way

This is a great way to handle multiple loans. Let's say you have a personal loan from a bank, another loan to buy a car, and a third loan to buy a home. You first want to focus on accelerating the repayment of one of these three debts while still committing to each loan. Monthly installments on other debts. There are two ways to do this. Right now:

The first method: repay the small loan

This method requires you to pay the minimum amount on all but the smallest debt, and you'll pay off as much of it as possible by “stepping up” payments on the smallest debt, quickly getting rid of it and moving on to the next smaller debt, all while Make the minimum payment on the remaining loan.

Let's say you have a $5,000 car loan, a $1,000 student loan, and a $3,000 personal loan. By choosing this method, you will focus on paying off the smallest student loan by making as many payments as possible, which will allow you to get out of one of the three loans faster and move on to the next smaller loan, That is, personal loans.

Method Two: Pay Off the Most Expensive, Most Beneficial Loan

This approach requires you to focus on paying off your most expensive and highest-interest debt while committing to paying the minimum amount on the remaining loan. Your focus on paying off the most expensive loan will help you get out of it quickly and save you a lot of money you would have paid in high interest, which eases the burden of repayment. The rest of your debt. This method is recommended if you have high-interest loans that are killing you and require a lot of time and money to pay them back.

Tips before buying your first car
Contrary to expectations, many people who are heavily in debt and taking out loan after loan do not know exactly the amount due on their debt, the interest, installments, repayment dates and other benefits that come with it (Shutterstock)

debt consolidation

This is a great way to reduce the burden of your loan and the large monthly installments you have to pay with each salary. Suppose you have 3 loans from 3 different parties (be it banks, private or government lenders) and you pay 3 installments every month which consumes your salary and income.

Here, we recommend that you consolidate these loans through a personal loan or a “debt consolidation loan” to pay off all your current multiple high-interest loans and keep only one loan with monthly installments instead of monthly installments Pay in three installments together.

Debt consolidation not only saves you the hassle of multiple payments and installments, it also reduces the amount of interest you pay, allowing you to pay off your loan faster and with less interest.

If your salary is not enough to help you take out a large personal loan to pay off all your debts, you can get such a loan by mortgaging a property or asset you own, and many banks and institutions grant such loans at low interest rates. That way, you only have to track, remember, and manage your fixed-rate monthly installments.

Allocate windfall to pay down debt

A windfall is any amount of money you earn in addition to your salary and regular monthly income, such as a special bonus you get from work, an award you receive at the end of the year, an inheritance you receive, returns on private investments, you earn awards, etc.

Here you must resist the temptation to spend money on various entertainments or buy luxuries that you don't really need. When you're in debt, it's wise to put all your energy into trying to get out of debt and use that money to reduce the burden of those debts.

2020 Personal Income Tax Tables and Calendar for those earning income under U.S. law. This is tax season, tax deadlines. Planning budget concept.
One of the easiest ways to manage your loan is to increase your monthly installments each time your income increases (Getty)

With each increase in salary or income, the amount of the monthly installment also increases

One of the easiest ways to manage your loan is to increase your monthly payments each time your income increases. If you have a higher income, instead of splurging on the extra amount, you can increase your monthly installments to repay the loan. By increasing your installments with each raise, you can shave months or even years off your loan repayment time and save money on interest, too.

customs clearance certificate

Finally, when the loan comes due, make sure you get a “certificate of discharge” proving that you have repaid the loan and that you have no other debts to the bank you're dealing with. This certificate is very important because it proves the fact that the loan has been repaid in full. Also remember to repossess collateral that was pledged, such as a car or property mortgage.

Source link

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button