Bogged With House, Car, and Personal Loans? Follow 4 Principles of Loan Management

Managing loans always becomes an issue when a person is dealing with multiple loan accounts. For a salaried individual who has recently purchased a home, a car, or both in an EMI, it’s important to understand how they can finance their loan.

When one doesn’t make an account for their repayment, the expenditure suddenly starts to balloon due to some life events. One can find it hard to maintain creditworthiness as they might start to miss payments or convert the credit card bill into an EMI, which ends up taking an enormous amount as an interest payment.

In this blog, we will discuss some of the common problems that can be solved by properly managing finances and making timely repayments.

Strategies to Follow to Manage Several Loan Accounts

There are multiple ways through which one can reduce the overall interest payments one needs to make towards meeting the financial obligations of loans. If a person can meet the needs of their family and can remain financially independent, then they can have the right choice to keep the money in certain funds where a person can save and keep some amount for their future.

Before that, they need to deal with their existing EMIs and how that can help an individual get on the right financial track and make investments for their future self and family. 

• A Strategy for Debt Consolidation

When it comes to managing multiple debt accounts, then the possible choice is debt consolidation. Through that, one can have a better position in terms of lower interest on loans and a faster process to cover all the essential expenses.

For debt consolidation, a person can visit the One Andro DSA app, and through that, they can make the possible changes that can improve the financial position of a person. In debt consolidation, one needs to take care of one deadline of payment rather than worrying about multiple deadlines that used to be there when one manages multiple accounts.

• Making Some Balance Transfer

For a person who is dealing with multiple loan accounts for them, it’s important to take care of finances by reducing the total payment that goes towards paying the interest. When a person has the right payment terms and all his debts are timely covered, then they get the chance to cover the entire balance account by shifting the debt to some other lender where the interest rate is much lower than the previous one.

An individual who is finding it troublesome to pay off the interest for all the accounts can go for the balance transfer route and can increase the loan tenure to reduce the monthly installment amount to ease out the monthly budget.

• Pre-Closing Some of the High Interest Loans

For example, a person who has a home loan, car loan, and a personal loan for them, it’s important to cover the personal loan faster as it takes the highest interest among the rest. One needs to close the accounts that have the highest interest rate and one needs to then look for other options so that they can cover all the interest faster and can repay the principal later.

For example, for a person who has some funds than those who have existing loans, it will be better for them to pay back some of the loan amount, and that will help to pre-close the loan on time. 

• The Avalanche Method: A New Tool to Reduce Debt

Next is the use of the avalanche method, where one pays a little extra than their monthly installment so that they can have a better chance to close the loan account faster. In the normal repayment rate, one needs to deal with the total interest cost, and here, in this method, the interest cost gets reduced.

A loan agent from the One Andro app can suggest all these techniques to the borrower, and they can follow the principles to get better access to their finances and make timely payments without getting bogged down in loans.

• A Better Strategy to Increase the Long-Term Income Opportunities

Finally, a person can look forward to increasing their net income faster to cover the existing debt, and that can happen through career progression, changing the job field, or starting a new local venture that can work as a substitute source of income until it gets big.

These are some of the prominent aspects that can allow a person to live a stress-free life, which will not have any financial burden in the form of debt.