Have Multiple Loans? Here Are Some Tips On How To Manage Money

It is important to calculate your equated monthly instalments and how they align with your overall income and expenses. Your EMIs should be such that you can continue to take care of your monthly expenses and also manage to save some money for the future. The EMIs should not become a burden or disturb your budget for household spending.

One of the biggest risks when it comes to managing multiple loans is missing out on your EMI payment. To simplify things, you can consolidate multiple loans into a single loan with a favourable interest rate. With this, you can extend the repayment period and save on interest payments.

To ensure you are on the right track, you need to consistently check your loan balances. It keeps you aware of the outstanding amount, along with the applicable interest rates.

It will also help you catch errors, if any, in your loan balance. You can raise a dispute if you find any errors. This will keep your financial history up-to-date and prevent any complications in the future.

You can set up automatic payments to ensure all your debts are paid on time. This will reduce the hassle of checking the due date by which you have to make the payment and will ensure you don't face any penalties. It will help you stay organised and save time. Sometimes, you may even get an incentive for setting up automatic payment for your loans.

You can prioritise clearing debt with the highest interest rate and short repayment periods. List your debts in descending order of interest rate and check which charges the highest interest rate. You should also check if there are any prepayment penalties on your loans. Further, if you receive an additional income, such as a bonus, use it to repay your loans first instead of spending on non-essential expenses.

Managing multiple loans could be tricky and may push you into a debt trap over a period of time. The most suitable way to avoid any financial crisis, when you have multiple loans, is disciplined money management. You should prepare a debt repayment plan and follow the timeline without any disruption.