Troubled with your monthly installments? Loan Refinance can be the best and easiest solution to cut down your Loan cost..
Is major chunk of your salary gone in paying monthly installments, paying credit card bills, and other bills that fall in your kitty? There is a way out to get you out of this messy financial situation of yours i.e. Loan Refinance. There are so many reasons why re-finance is a better deal to crack open your debt cycle.
Case: Manish is an average self-employed individual and he borrowed multiple loans through various banks and has also borrowed money through Credit Card as well. Manish is burdened with the loan load that is to be paid every month and barely gets to see his salary – what should he do?
- In this case since Manish has taken multiple loans and he is struggling to pay multiple EMIs.
- He is paying a lot more money towards the interest charged on multiple loans and also credit cards. Therefore his debt cycle has become vicious and is going on like a never ending story.
- Manish may end up defaulting that would lead to poor credit history and therefore a poor credit score.
- It will not be easy for Manish to borrow more loans until he cracks open the debt cycle and hands his cash crunch situation in a smart manner.
Solution: In this case it is wise for Manish to borrow only one consolidated loan that would help him get away with multiple loan accounts and also pay off his credit card bills once for all.
What is so good about Loan Refinance?
- You get to transfer your Loan from a Higher Rate of Interest to Lower Rate of Interest:
Many people are looking at loan re-finance as a go-getter opportunity to lower their loan load by getting a chance to re-finance the loan at a lower rate of interest. The moment the rate of interest for your loan changes everything from the monthly EMI, to amount charged as interest changes for your good as it drastically reduces the overall cost of your loan(s).
- You can take a Loan Top-Up:
Re-finance is trending owing to the fact that you can, not just lower down the cost of your loan but also borrow more amount (if you require) at lower rate of interest, which makes the deal even more lucrative especially when you require money.
- Consolidation of your Debt:
Refinance can also serve beneficial if you have multiple loan accounts and are therefore paying more towards interest. You can club together all your debt to make one consolidated loan and repay through single loan account. Getting a lender who can lend you the amount equivalent to all your debt clubbed in together at lower interest rates can serve beneficial. You will successfully be able to say a goodbye to default if you had to pay only one EMI.
- Enhance Your Credit History: Having multiple loan accounts and inefficiency to pay your EMIs and credit card bills in time can show your incompetency to pay your outstanding loan smoothly. Hence, having a single loan account will serve beneficial as there would be no pressure of handling multiple loan accounts and therefore less chances of default thus improving your credit history and ultimately your credit score over a period of time. Whereas, having multiple loan accounts can reduce your credit score.
The most important aspect to be taken into consideration before refinancing is to choose the right home loan refinance lender. If you fail to find a right lender or can’t find a better deal, you should not refinance.
If you are trapped in a vicious debt-cycle, it is high time that consider a Loan Refinance and crack open your debt cycle.
This is a guest post by Ila Florance of Letzbank.com.
About the Author / Company :
Ila Florance Joseph is Content Writer and Editor at Letzbank. She holds a Master’s Degree from Punjab University, Chandigarh. She comes with a vast professional experience of over 9 years. She is passionate about work and loves to empower her readers with her blogs and articles.
Letzbank is an online portal where you can SEARCH>COMPARE>APPLY for all types Loan Products and Insurance Products offered by leading banks and agencies. You can also Check your Eligibility to borrow loans, plan your loan EMI by making use of EMI Calculators, fore-see loan stages throughout the tenure for a better financial planning, check your Credit score & Credit History, e-file Tax return etc., through a single window.
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(Image courtesy of Stuart Miles at FreeDigitalPhotos.net) (Post first published on : 28-April-2017)