SEVEN SMART WAYS TO REDUCE YOUR LOAN BURDEN

Aug 20, 2022 | LOAN NEWS

There are several smart ways to reduce your loan repayment rates over time. Here’s a look at some of the easiest methods you can try. Take this advice and pay back the money you owe with ease.

SEVEN SMART WAYS TO REDUCE YOUR LOAN

1. MAKE A BIGGER DOWN-PAYMENT

Making a bigger down payment will reduce the overall loan amount. When the loan amount is smaller, the interest burden also becomes smaller. This means that you will end up paying less in the long run.

2. INCREASE YOUR MONTHLY INSTALLMENTS

It’s important to keep in mind that interest accrues as time goes by. By paying higher monthly installments, you repay the loan faster. It also saves you some money in the long run because you pay less interest.

3. HOME-LOAN PREPAYMENT

Prepayment is when you pay a lump sum amount to reduce the outstanding loan. With prepayment, your payment pays off a portion of the interest and a large part of the principal loan amount. This means that your principal loan amount and your interest burden will decrease.

4. CHANGE YOUR HOME-LOAN TENURE

A shorter loan period will enable you to repay your loan quicker and save you interest charges. The only downside is that your monthly installments will be higher. By increasing the period, you will have more breathing room with your personal finances. However, it will also increase the interest paid over time, costing you more in the long run.

5. TRANSFER YOUR HOME LOAN

You can often negotiate interest rates with the lender if you have a good credit score. A lower interest rate means you will have to pay less interest.