Savings are not always enough to sail through certain emergencies in life, including big purchases. In situations like these, most people resort to taking a personal loan. Without a doubt, personal loans have payable interest rates on the loan amount. But what if we tell you that taking a personal loan can help you save your hard-earned money in the long run? The following are five of the most important ways on how you can save some money by opting for a personal loan:
Also, the personal loan will be at a lower interest rate (8-13%) compared to the exorbitantly high interest rate (20-25%) on credit cards. You will end up saving a lot of money by opting for this route.
Now, when your credit score is decent, you can easily apply for new loans in the future and negotiate interest rates on your loan. A lower interest rate means lower interest outgo that effectively translates into savings in terms of money.
The option of repaying your loan early (pre-closure) lets you start saving money once the loan is repaid. A foreclosure also enables you to save money on the interest you would have paid if you continued the loan till the end of its tenor.
You can circumvent all this by availing a personal loan that usually has only a minuscule processing fee and comparatively lower interest rates. Thus, helping you avoid these hidden fees and saving money.
A personal loan will be divided into monthly instalments that you can pay with your monthly income. Ensure that the monthly instalment amount does not exceed 35-40% of your monthly salary—advice reiterated by money managers and financial advisors in personal finance sessions.
Personal loans are a safe, inexpensive, and practical choice for people who need to cover their expenses. To know more about personal loans and compare multiple loan options, visit Finserv MARKETS by clicking here. Happy Savings!