Sure, borrowing a loan is convenient to meet your financial needs without draining your life savings. But if you have multiple debts, repayment may not be a walk in the park. After all, each loan has a different repayment schedule and interest rate. The mounting EMIs can also be pretty stressful after a while. And may take a toll on your savings.
So, is there a way to make the repayment process simpler? Why yes! In this scenario, you can consider opting for a consolidation of existing loans to reduce your outstanding debt.
Here are 5 practical tips to save on EMIs through debt consolidation.
#1Take a personal loan to repay existing debt
Wondering how to consolidate all loans into one? The answer is by taking out a new loan. This means all your existing loans will be combined into a single loan equivalent to the amount of your outstanding debt.
Besides, the new loan comes with more favourable terms and a lower interest rate, so you can repay the amount in comfortable EMIs.
#2 Compare different lenders
When it comes to borrowing a personal loan, the first step is to choose a reliable lender. And so, when you think about switching your lender, make sure that you find one offering better loan terms than your previous ones.
Compare multiple lenders online and study their fees and other charges before zeroing in on one. By choosing the right lender, you can save a considerable amount on your EMIs!
#3 Choose a longer repayment tenure
As you may know, the repayment tenure directly impacts your monthly loan instalments. Therefore, an efficient way to save on EMIs is to select the tenure of your new loan wisely. Opting for a longer repayment tenure will help disburse the total amount over a more extended period. As a result, your EMI burden will be reduced considerably.
Additional Read – Simple and Smart Ways of Debt Consolidation
#4 Look out for prepayment charges
While the prospect of instant debt consolidation loans is appealing, you shouldn’t jump the ship so easily. If you want to close off your loans earlier, consider a lender who permits prepayments at nominal or no charges.
This way, you can use your disposable income to pay a larger portion of the loan and lower the EMI amount.
#5 Opt for a co-applicant
Did you know you can add a co-applicant to increase your personal loan eligibility and reduce your EMI burden? Yes, you can!
If you think your current salary is insufficient to avail a large amount, you can add a co-borrower to your application. The joint income will not only make you eligible for a higher loan amount but can also decrease the interest rates and EMIs, provided your co-applicant has a good credit score. Thus, choose the co-borrower carefully as it can significantly impact your application.
Additional Read – How Can You Consolidate Multiple Loans with the Help of Personal Loan?
By keeping the above tips in mind, you can save on EMIs and quickly repay your existing loans. And if you are looking for a trusted lending institution, Tata Capital is at your service. We provide loans at competitive personal loan interest rates and can help tide over your finances seamlessly.
So, why think twice? Contact Tata Capital today!