Be it a personal loan, a car loan, business loan or a home loan, each one requires you to pay back the borrowed amount at a predetermined interest rate. Although the loan amount payable remains fixed, your finances may not. There are plenty of reasons attributing to this such as job changes, medical illness, accidents and other factors may negatively impact your finances. If your loan payments are taking a toll on your budget, follow the steps below and you are sure to be on track.
Negotiate with Creditors
Honest communication can work wonders! Compile a list of all your lenders and the amount you owe them. Contact each lender and let them know you’re willing to pay the debt in full but can only afford to pay a particular amount each month. If your loan providers are satisfied with the negotiation, they may be willing to lower the interest payment for a period of time. Once you have an agreement with the lender, make sure to get it in writing, preferably on company letterhead, before proceeding.
Consolidate your Debt
If you have multiple loans, combining your debt with a debt consolidation personal loan can lower your monthly payments significantly. Calculate the interest rate paid on your current loans and choose a debt consolidation plan which has a lower interest rate. You can get up to 45% lower EMs with a debt consolidation personal loan on Finserv MARKETS!
Sign Up for Credit Counselling
At times, credit counselors can help you negotiate lower interest rates and loan payments from creditors. Enrolling under a credit counselor’s debt management plan will help you get lower monthly payments, thereby making it easier to pay off your debt. Additionally, credit counselors can also help you make a budget and teach you the much-needed money management skills.
Sometimes, even lowering the loan payments will not be of much help. In such situations, you can consider filing for bankruptcy. You can only file for bankruptcy if your liabilities exceed your total assets. Filing for bankruptcy with the court clears you of any legal obligations to pay back your creditors. However, this measure should only be taken as the last resort because in this case, all your assets will be seized by the court.
You can also get to know about the ways to reduce home loan.
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