Personal Loans are the best means to meet all of unseen events of life. Opting for a loan that is unsecured in nature without getting through its terms and conditions can cost you more than you thought! If you feel that you are stuck in a debt of personal finance, here are some of the ways to get rid of this debt easily:
Asset Monetization: You can monetize one of your assets such as car, home, Life Insurance policies, tax saving certificates, shares and bonds. With the help of this, you can easily pay off your personal debt. In fact, there is an option to take the loan against such assets that can be used to settle down the personal finance payment.
Debt consolidation: Another way to fight hard with debts is known as debt consolidation. In this method, a person pays very low amount EMI along longer tenure periods. Under this method, all of the debt portfolios will be combined into one. It is the effective method to take pay off all of the loans when you do not have sufficient monetary capacity. However when you will calculate the total cost of the loan, it can go very expensive.
Take top up or opt for a secured loan: The most viable option is to talk to your bank for a loan against your assets such as cars, house, shares. It is possible to take credit against it, when your property is free from all of the debts and mortgages. The only drawback in converting the unsecured loan in to the secured one is that you can lose your property against in case of any default on the loan amount. It is advisable to analyze your repaying capacity before converting or restructuring your loan.
Personal Loan being unsecured in nature carries very heavy interest rate, so it is advised to close this loan as soon as possible.
Always remember a single default in your loan payment can create a problem in the current loan and in getting the loan in the future. For the first time, talk to your lender they will impose a penalty of 2 % to 3 % on the loan amount.
Evaluate other options available other than Personal Loan:
- Other options can help you in meeting all of the personal contingencies. These options are monetizing assets like shares, bonds and shares.
- If you are a salaried individual, try to approach for a bank where your salary gets credited. If you are a self employed person, try to opt for a bank where he currently has his savings or current account in that bank.
- A person should opt for a personal loan when he does not have any assets to pledge as collateral to the bank.
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