Loans are a fundamental thing of our day to day Indian Life as majority of people here in India are from the Middle Class and we are a developing nation and that means a lot of people are looking to upscale their lives and a majority of them have either a Home Loan or a Car Loan in their everyday life. Even though a Loan is something that we should stay away from as much as possible, it is very much a necessary evil in our road to Upscaling our lives. But if you have indeed taken a Loan for whatever purposes then you should have a proper strategy as to how you are going to repay that Loan.
So How Do We Plan A Loan Repayment Strategy?
If you want a proper Loan Repayment Schedule then you should start with the fact that do you want a secured loan or an unsecured loan. Secured loan is one where you put up something as collateral for your loan and in most cases it is less risky than unsecured loans as here you definitely need a proper Loan Repayment Plan to be on time with your Payments. Now you need to decide on three factors that affect the majority of your decisions, one is the Amount of Loan required, second is the rate of interest on the loan and finally you need to decide the time period of the Loan you want to have.
Once you have all three factors decided then you start the actual Loan Repayment process. Now usually we have our usual EMI 2 pay every single month but there is a process where you can either lower your EMI or the actual tenure of your Loan by prepaying some extra amount every single month or whenever you get some extra cash.
Prepaying amount of your loan is not always included in your loan statement so whenever you are taking a loan make sure that there is an option of pre-payment included so that you are not charge with extra interest for prepaying your loan. I am saying this because I accidentally took a Loan which had a penalty for prepaying, even though the loan amount is quite minimum since there is a no pre payment policy I am unable to clear my loan and have to wait one more year to clean my entire loan. So makes sure that there is no penalty for prepaying your loan as that will be an extra burden to add to your interest.
Finally I would like to add that Having no Loan is always the best option in my mind.
