Outlook Money
It is one of the forms of unsecured loans which is given by banks and other non-banking financial companies for any purpose like setting up a home, a wedding, or for some other financial purpose.
Fast repayment in the case of personal loans is essential for it helps save on interest with a lower total amount of debt burden, hence it helps in better financial management.
One of the most obvious ways of recovering the loan amount quickly is by paying extra every month. It helps in reducing the outstanding principal and interest. If one cannot pay the extra money all at once, break it down into convenient portions.
Loans can be repaid within a lesser duration if the shorter loan tenure is opted for. This reduces the time needed to fulfill the repayment process, and in this more EMIs are paid which significantly reduces the total interest amount paid in the whole tenure of the loan.
Late payments can damage credit scores and may even attract additional fees if the repayment of the loan is delayed for a longer period.
One should review the loan statement showing periodically how much of the payment is being applied to the principal and how much to interest. The flexibility to adjust repayment plans in case of any change in circumstances can include extra payments or increased EMIs.
Compiled by Syed Muskan