03 September 2011
How to Come Out of Many Loans?
Have you taken too much on your plate? More than you can chew? I am not discussing meals on this home loans blog but here I am mentioning the latest trend seen among many borrowers especially among newly wedded couples. Suddenly all the finances go off hand and you end up with stress and burden of repayments!
How to come out of the many loans you are committed to? when beginning your new life the couple often think in terms of monthly salary and it is easy to say they club their income and make a larger amount. Considering this they go on purchasing the LED TV, Bigger capacity Refrigerator and an Split Air conditioner, all on loan! Then begins the journey of repayment and as months pass with all your other monthly expenses there may also be a tendency to splurge on food and travel. So sometimes if not planned your finances are in a mess.
Sit down with your spouse and other members of the family and consider critical financial planning. Note down your income and expenditure. By income I mean total take home income and not your salary quoted on your monthly salary slip. Try to see high interest expenses or loans. First prioritize all your loans and see where you are paying very high interest amounts. Form a list of all your loans in hierarchy according to the amount and interest payable to the loan lending company. Chop off small loans by selling some assets or investments first so that you come out of some loans.
Usually personal loans for decoration and renovation of home are the costliest. Car loans, refrigerator and TV loans are also ones that can be come out of by paying larger sums from your salary for some months. The most advisable and larger amount of loans remaining will be your home loans, which cannot be come out easily as they are of larger amount. Here you will have to patiently keep the repayments going on.
I would suggest not to take more than you can chew but if you have already committed to many loans try to first come out of smaller loans and then larger ones will follow. Make a habit of saving at least some, so that even when you are out of your loans you will continue saving for further investments. This will take many years and is not easy to come out of loans but with financial planning and right calculations you can come out of the many loans you are stuck up with.
Unless of course you are very lucky to have inherited a very large amount and you come out free of all your loans by this magic wand immediately!