5 Easy Ways to Pay Off Your Personal Loan Fast

personal loan

Personal loans have become a part of most people’s daily lives. Personal loans are the most convenient way to finance your needs and even occasional pleasures, whether you’re buying appliances, going on vacation, starting a business, or even covering emergency bills. Obtaining personal loans has become a considerably more straightforward process in recent years.

However, you must also have a clear idea of how to swiftly return your personal loan. Smartly planning your payback approach not only saves you time but also improves your financial situation.

Foreclosing your personal loan

Personal loans are commonly used to bridge short-term financial gaps. A personal loan, on the other side, does have an interest rate and a repayment period that might be anywhere between 12 and 60 months. As a result, while you were able to meet your immediate financial demands, you now have a financial obligation to repay a portion of the principal amount borrowed plus interest. You will also be required to return the loan within a 12-month period.

If you have sufficient funds, foreclosing on your personal loan is the best alternative. This can be done as soon as the lock-in term on your loan expires. Even if you have to pay a penalty, prepaying your personal loan saves you a lot of money in interest and significantly reduces your financial stress.

fast personal loan

Repay Quickly on a Higher Interest Rate

Remember that even if you qualify for a personal loan, you’ll pay a greater interest rate than you would on a home or auto loan. While everyone acknowledges that personal loans are an essential path to funding, they can also lead to debt traps if you are unable to return them within the given timeframe.

If you have other loans with lower interest rates, repaying your personal loan with a much higher interest rate first makes a lot of sense. Prioritizing debt repayment is another wise method to ensure that you pay it off promptly.

Go in for a debt consolidation loan

If you have many debts, including personal loans, you may find it difficult to pay your monthly EMIs on time. It is important to take out a debt consolidation loan to ensure that you do not fall behind on your personal loans payments too often.

You may consolidate all of your debts, even credit card debt, into a single entity with a debt consolidation loan. Instead of making multiple payments at various interest rates, this strategy yields a single monthly payment at a fixed rate. With a debt consolidation loan, you will often pay a lower interest rate on your monthly installment, making it much easier to effectively manage your budget.

Get a home loan top-up

Instead of taking out a personal loan, if you already have a home loan, you can take out a home loan top-up to cover any unexpected home remodeling needs. In comparison to personal loans and even credit cards, home loans have lower interest rates.

It not only assists you with debt consolidation but also decreases your monthly payment. Furthermore, rather than spreading your debt across many loan platforms, you are servicing a single loan account.

Personal loan balance transfer

If you have a credit card with a high spending limit or are unhappy with your current lender, a personal loan balance transfer could help you pay it off quickly. Your previous outstanding balance is totally closed under this arrangement. In addition, you might be qualified for a larger loan with a reduced interest rate.

This makes sense if your personal loans have a higher interest rate and your credit card company offers you the option to transfer it to a lower interest rate. However, you may only do this if you have a decent credit score.

Above all, ensure you never skip on your loan’s EMI payments. Choose the auto-debit / ECS option, which is available from most lenders, and make sure your bank account is properly funded to handle the payment. If you miss an EMI, you’ll be charged a penalty, and if you don’t have enough money in your account, you’ll be charged a bounce fee, which will raise the cost of your loan.