Tips to Reduce Your Personal Loan Burden Faster


A personal loan comes as a saviour in times of urgent financial needs. With Fullerton India instant personal loan online disbursal plan, you can enjoy a plain sailing loan sanctioning process that involves uncomplicated documentation and quick processing. 

 A personal loan does not require any security; therefore, the interest rates are higher than that for a secured loan. 

Again, if you choose to avoid the timely payment of EMI, it can add up to become a larger amount in the future and your credit score may also get affected. Fullerton India instant personal loan online addresses all your concerns with inclusive loan schemes. 

 Following are a few effective methods that you can implement in your loan repayment:

 1. SNOWBALL METHOD*: In the debt snowball method, you need to start paying off your debt with minimal amounts at the beginning and then following up with larger amounts. This can reduce the burden at the beginning of the debt clearance process and you will get time to manage your finances and generate new sources of income before the time for larger payments arrives.

 The larger payments can be done towards the end of the tenure and the largest amount can be paid at the end to finally clear off the debt. 

2. STACK METHOD*: This method involves the payment of loans with varying interest rates.

 In the initial months, the EMI can be paid at a higher interest rate and the EMI with lower interest rates can be towards the end. This will shorten the time of loan repayment and you can get rid of your debt faster.  

Any of the above methods can be chosen for easy loan repayment but, you should make a wise decision while choosing a method depending on your needs and financial condition.

*Please note that not all lenders offer this facility. Most lenders offer a fixed interest rate, as per which the monthly EMI and loan schedule is drawn. However, they may offer the option of reducing or increasing loan tenure so that EMI amount changes accordingly (as long as the overall tenure is between 12 – 60 months). It is advisable to check with the lender first, before making a repayment plan.

3. Paying the loan in advance: 

Advance payment of a loan may not be one of the items on your to-do list for the month but, when you get any salary hike, bonus, or additional income, try to play smart with the prepayment of your loan. Paying the loan before the actual tenure gets over saves you from compounded EMIs and gets you rid of the debt faster. So, whenever your finances are going well, make a wise decision and try to pay off the loan before time.

4. Debt Transfer:  

With this method, you can get the advantage of paying your loan at a lower interest by changing your lender. You just need to transfer your existing loan to a new lender who will charge lower interest rates. To access this advantage, you need to pay your EMI on time and get a good credit score for yourself. After that, you can approach a new lender who will let you pay the same loan with reduced EMI.

5. Partial Payment**: You can find a few lenders who give a provision for partial payment of personal loans. In this method, you can pay a percentage of the loan amount at once to reduce the actual sum and pay the loan faster. An increment in your salary, savings, or financial incentives can be used to prepay the loan and reduce the EMI in the future. As your actual sum reduces, so does the monthly EMI and thus, the personal loan burden is eased off.

*Please note that many lenders many not offer a part-payment facility for personal loans. They may offer foreclosure options, where in borrowers can pay off the entire remaining amount. However, this facility can be availed only after 6-12 EMIs have been paid, and may also attract upto 7% of the outstanding amount as foreclosure fees.

6. Loan Consolidation: When you have multiple loans and credit card bills to pay, you naturally struggle with paying multiple EMIs. Multiple loans can drastically affect your budget and most of your income gets distributed into EMIs. To avoid this problem, you can rather opt for a personal loan and consolidate your debt. By this method, you can reduce your EMI and pay multiple loans with one EMI.

7. Loan Top-up (Personal/Home): When you have already taken home or a personal loan from a bank and along with that you also have a good credit score, in this case, you become eligible for a loan top-up facility. If you get the top-up plan at lower interest rates, you can utilize it to pay off your existing debt. One thing that you need to keep in mind is that a good credit score and a history of timely repayment of any prior debts is a must if you want to avail of this offer.

8. Utilizing the current investments

Although it is not advisable to hamper your investments like PPF or Insurance before they mature, you can use them to repay your debt in urgent situations. Your current investments can reduce the burden of your future if you use them to repay your loan. In this case, you need to take a calculated risk to avoid any financial crisis.


The tips mentioned above will help you in reducing the burden of personal loan. 

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