An individual can avail a loan for several purposes like home renovation, going on a vacation, medical contingencies, etc. Today, the repayment of these loans has also become easier as HDFC Personal Loan has introduced online repayments of the loans taken via various online modes which include net banking and HDFC mobile app. The login process is very simple. Any individual who has taken the loan can repay the loan amount through post dated cheques or ECS.
Although personal loans carry higher interest rates, it is not very difficult to repay the loan amount if the borrower has already decided to pre-pay them. For this, all a borrower has to do is put the repayment of these loans as a priority or he can just transfer the balance. The maximum time given to repay the personal loan amount is five years. Some lenders claim to avail the loan for a tenure upto seven years. Due to this there is no demand for collateral in these types of loans by the lenders.
As in this loan lender takes many other factors into consideration before giving consent to the loan disbursal process. The loan amount is to be paid off on a monthly basis. However, some borrowers find it difficult to repay the loan amount and complain about how the Equated Monthly Installments (EMIs) take the major portion of their monthly incomes.
This problem of the borrowers can be resolved by following the below mentioned points:
Loan pre-payment: Many borrowers apply for a personal loan when they are in urgent need of the money to meet up a particular expense. This is where they use the personal loan amount credited to their accounts. Further on when the urgent requirement has been met and the borrower receives the funds from his regular income source, instead of re-investing those funds he can consider repaying the loan before the completion of the loan tenure. This way they will be saved from the continuous payments of EMIs for a longer duration.
Prioritize repayment of debt with higher interest rates: Due to availability of loans in multiple numbers, people tend to fall in a debt trap. It is well known that a personal loan interest rates charge higher than credit cards or home loan repayment options. Therefore, it has become of utmost importance that the borrower prioritize his loan repayments in descending order of the interest rates associated with each loan. This means repaying/prepaying the loan with the highest interest rates first.
Taking home loan top-up helps: This option is not much heard of and therefore, too few people understand what it is. A borrower having home loan along with a personal loan and credit card can take top-ups on the home loan to prepay the personal loan and avail the benefits of lesser loan accounts.
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