LOAN FOR DEBTS
Don’t let the debt scare you. Essentially, debt financing is the act of raising capital by borrowing money from a lender or a bank. In return for a loan, creditors are then owed interest on the money borrowed.
Managing debts is not difficult if you have the right attitude. You should be, however, willing to lead a more disciplined life, willing to sacrifice certain luxuries if necessary, and you can do that only when you understand that you are working towards a stable and worry-free future. Even when the debt is paid off, make managing your finances a habit “It will be life-changing”
Managing multiple debts can be overwhelming. Take a single loan and consolidate all others. Apply to Prafton Finance to get rid of the burden and moderate the number of customers’ debts. If your credit card bills are piling up and you are receiving frequent calls for debt consolidation. A single personal loan for debt consolidation makes it convenient to make monthly payments. It allows you to pay off the principal loan amount quickly as the rate of interest applied is comparatively low.
10 GOLDEN RULES TO FOLLOW WHEN TAKING LOAN FOR DEBTS:
- Don’t borrow more than you can repay: The first rule of smart borrowing is what the older generation has been telling us all the time: don’t live beyond your means. Take a loan that you can easily repay. The thumb rule says that: your monthly outgo towards all your loans put together should not be more than 50% of your monthly income.
- Keep tenure as short as possible: The maximum home loan tenure offered by all major lenders is 30 years. The longer the tenure is the longer will be the EMI, which makes it very tempting to go for a 25-30-year loan. However, it is best to take a loan for the shortest tenure you can afford. In a long-term loan, the interest outgo is too high.
- Ensure timely and regular repayment: It pays to be disciplined, especially when it comes to repayment of dues. Whether it is a short-term debt like a credit card bill or a long-term loan for your house, make sure you don’t miss the payment. Missing the EMI or delaying a payment are among the key factors that can impact your credit profile and hinder your chances of taking a loan for other needs later in life.
- Don’t borrow to splurge or invest: This is also one of the best rules of investing. Never use borrowed money to invest. Ultra-safe investments like fixed deposits and bonds won’t be able to match the rate of interest you pay on the loan. And investments that offer higher returns, such as equities, are too volatile.
- Take insurance with big-ticket loans: If you take a large home or car loan, it is best to take insurance cover as well. Buy a term plan of the same amount to ensure that your family is not saddled with unaffordable debt if something happens to you.
- Keep shopping for better rates: A long term mortgage should never be a sign-and-forget exercise. Keep your eyes and ears open about the new rules and changes in interest rates. The RBI is planning to change the base rate formula, which could change the way your bank calibrates its lending rates.
- Understand the fine print: Loan documents don’t make for light reading. Paragraph after paragraph of legalese printed in a small font can be a put-off. Yet, read the terms and conditions carefully to avoid unpleasant surprises.
- Substitute high-cost loans: If you have too many loans running, it’s a good idea to consolidate your debts under one omnibus low-cost loan. Make a list of all outstanding loans and identify the high-cost ones that can be replaced with cheaper loans.
- Don’t nix retirement by avoiding loans: Indians are emotional about certain financial loans, especially when these relate to children. Give a choice, no parent would want to burden their children with a loan, especially for education.
- Keep spouse, family in the loop about a loan: Before you take a loan, discuss it with your family. This is important because the repayment will impact the overall finances of the entire household. Make sure your spouse is aware of the loan and the reasons for taking it.
6 WAYS A LOAN FOR DEBT WILL BENEFIT YOU FROM PRAFTON FINANCE:
Loans for debts are gaining popularity, however for many reasons. Here’s a look at the various benefits of a loan through prafton finance:
- Built or support your credit score: Ten percent of your credit score is based on your “credit mix”, or the different types of credit you have, such as credit cards, installments loans, and finance company accounts.
- Pay for planned expenses with a lower interest rate: Many credit cards carry relatively high-interest rates, especially after any low -or no-interest introductory ends- than can cost you a lot of money.
- Refinance your high-interest debt with a lower interest personal loan: If you have high-interest debt consider paying off that high-interest debt as quickly as you possibly can.
- Consolidate multiple debts: Managing debts is the most common reason people take out personal loans. By taking out one personal loan to pay off several debts, you’ve consolidated your bill-paying nightmare into one payment per month.
- Know when you will pay off your loan: With a fixed-rate and loan term, your monthly payments will be predicted compared to the payments on a variable rate debt.
- Borrow money without risking your assets: Not all personal loans are unsecured, but many are. You may prefer to take out a loan that is not attached to your house.