How Effective Management of Multiple Loans Runs

by Avisekh Sharma / May 9, 2021

All of you must be having some loans either for fulfillment of your desires or for any particular professional or personal need. The advent of so many private lenders apart from public sector banks, have introduced so many luring offers, attractive interest rates and easy payment options have made it easy for everyone to get loans  for different purposes. With your good financial record and credit score, you can avail multiple offers from multiple financial firms. Having too many loans is not bad but if managed efficiently. More number of loans means more the liability and more burden on your income. Sometime it might not be in favor to have multiple loan accounts and in some cases it can push you to an unwanted and critical situation. So, it is very important to understand our needs and take loan responsibly and manage multiple loan accounts efficiently and effectively. Now, the question is , how multiple loan accounts can be managed? There are a few basic points which, if adhered religiously, can help you to manage your multiple loans and save you from any financial instability.

  1. Understand your loans: While taking multiple loans you must be aware of the type of loans, pay back schedule and tenure, rate of interest of each loan, for enclosure conditions and penalty etc. All these awareness helps in managing your several credit accounts. You must be better judge to decide which loan should be closed earlier and which can be carried forward as per your income.

 

  1. Prioritize your payments: Always prioritize your payments. Having multiple credit accounts in your name might some time put you in situation that either you forgot the payment schedule unintentionally or you are not in a position to honor your installment in time. In that case, any late payment can attract a penalty or higher rate of interest on your outstanding amount which would again not good for you. So, it is advised to pay your installment first which has high rate of interests or expensive in case of default payment.

 

  1. Loan Consolidation: It is one of the best ways to manage your multiple loans. Holding several loan accounts has different conditions, interest rates, EMI Schedules etc. Consolidating your many loans to one, not only would save your money but also make your life more easy and hassle free. Many banks and institutes offer consolidation loans which are most of the time are on lower interest rates than your existing loans.

 

  1. Increase your EMI: Whenever you got an increment, increase your EMI accordingly. Paying higher installments would help you to reduce your payback period and also would save more money in terms of interest you would pay for longer period Also closure of credit account timely can also help you in having a good creditworthiness.

 

  1. Utilize additional earnings: Holding so many credit accounts can sometime make you feel stuck in many situations. It is always better to reduce the burden of liabilities. Utilize your expected or unexpected funds which you might receive in terms of Bonus, returns on your investments or any gain in some way, in repaying your debts. Many financial firms offer less penalty on foreclosures. SO, it is better to use your additional money in reducing number loans which will certainly benefit you in several ways.

 

  1. Switch lender: Always keep on searching and looking for different schemes and offers of multiple lenders. Make a thorough comparison of terms, conditions, rate of interests, pay pack period, EMI, foreclosure etc. with new and existing lending company, Switch to one who is offering better interest rates and benefits as compare to the existing one. This is the simplest way of reduce your burden. Today, many banks and financial firms are offering loan switching facilities but before doing so, make sure to be aware of all the conditions, costs and all pros and cons of opting such facility.

 

  1. Additional Income: This is need of the day. It is always better to have multiple source of income. Dependency on a single income can create serious issues in case of having burden of multiple credit accounts. Always try to make best of your time and find different avenues that can help you in earning more along with your regular monthly income. A slightly increase in your income will make you feel more confident and you can easily pay off your debts. This income can be from multiple jobs or investments like income in form of commission for any advisory services, part time jobs, profits from equity or any kind.

 

  1. Payment on Scheduled time: Make your payment on due dates or before. This will reduce the risk of penalty and save you from paying higher interest as late payment charges. Easy way to do timely payment is to opt for

 

 

  1. Spend less Save more: If you won’t be able to make additional source of income than this is the only resort to your problem and can help you effectively manage your loans. Try to bring down your expenditures on avoidable or unwanted luxuries and expenses and try to save more to pay back your loans. This would also inculcate a habit of saving in you and benefit you in different ways

 

 

All the points discussed above can help the efficient management of multiple credit accounts. Loan is the option that facilitates you to fulfillment your number of tasks and desires. Availing home loan, car loan, bike loan, loans for house hold articles, personal loans for various needs, business loans, education loans many more, make your life smoother and happier. Existence of multiple financial institutes and their healthy competition have increased the boundaries of financial market and benefited number of people to bring in happiness in their lives. But this facility should be opted responsibly and cautiously. Any decision made in unplanned way can create big troubles for you. Always make calculative decisions while taking multiple loans because you have to pay it later intelligently.