Be it personal loan or credit card, settle any loan with ease

Inflation is at its peak. In such a situation, people resort to loans for everything from buying a house to getting their daughter married. But many times a loan or credit card bill taken without thinking traps you in the debt trap. Today we will tell you about some such tips with the help of which you can easily get out of the debt vortex.

Take a loan as per your need

When you take a loan, the bank or the agent tells you about many schemes. One of these schemes is that if you take a larger loan, the interest rate will be lower, if you take a loan for a longer period, the interest will be lower. But you should ensure that you take only as much loan as you need. If you are already paying EMI of a loan, then avoid taking another loan.

Set up income, debt and savings

If you have taken more than one loan, then first of all you should set your income, expenses, debt and savings. This will help you in setting your spending limit and making a plan for spending money. You should spend only as much money as you have in surplus. 

While preparing this list, you should also note how much interest is being charged on which loan. For example, home loans charge less interest than personal loans and credit cards. Therefore, the first focus should be on settling the loans with higher interest as soon as possible.

To avoid the burden of EMI, you can also choose the option of pre-payment i.e. payment before time. You can increase your EMI by 10 percent annually by increasing your savings. By doing this, you can save up to 65 percent of interest. 

You can adopt the method of re-finance

To reduce the burden of EMI, you can also adopt the method of re-finance. Under this, you can convert expensive loans into cheaper rates. For example, if you have taken a loan from personal or credit card, then you can eliminate that loan by taking a home loan. Because the interest rates on home loans are low.