10 Smart Tips to Pay Off Your Loan Faster
MC Desk | January 23, 2025
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Switching from monthly to bi-weekly payments allows you to make an extra payment every year.
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If your EMI is Rs 13,700, paying Rs 14,000 instead can make a noticeable difference.
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Use any windfall income—bonuses, tax refunds, or gifts—to make lump sum payments towards your loan principal.
Channel Bonuses Towards Loans
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As your income grows, consider increasing your monthly EMIs.
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Focus on repaying loans with the highest interest rates first.
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Refrain from taking on additional loans while repaying existing ones.
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Most lenders allow partial prepayments on loans without penalties. Check the terms and conditions of your loan and utilise surplus funds to make such prepayments.
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Reducing discretionary spending can free up funds to pay off loans faster.
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If market rates have dropped or your credit profile has improved, consider refinancing or transferring your loan to a lender offering lower rates.
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Regularly review your loan repayment status. Seeing the balance decrease over time can serve as motivation and help you stay disciplined in your efforts.
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The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
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