Repaying a personal loan can be quite difficult at times. If you encounter a cash crunch and there are EMIs to be paid, then it's natural for you to become worried about loan default. However, no matter how bad a situation is, there is always a solution if you know where to look.
ying About Defaulting on a Loan, Read This Guide Repaying a personal loan can be quite difficult at times. If you encounter a cash crunch and there are EMIs to be paid, then it's natural for you to become worried about loan default. However, no matter how bad a situation is, there is always a solution if you know where to look. If you are having a hard time catching up with your loan’s EMIs, then the following are some of the things that you can try to prevent defaulting:
If you are repaying different types of debt including personal loans, credit card payments, home loan, etc. then you can lower your financial burden through debt consolidation.
In debt consolidation, the lender combines all your debts into a single debt. So, instead of paying multiple EMIs for multiple loans, you have to pay a single EMI every month. However, the interest rate levied on the new consolidated debt or loan is lower than the individual interest rates on individual loans. Plus, it's easier to track a single loan than multiple loans.
Refinancing is a great option if your loan is still relatively new and you want affordable EMIs for easy repayment. In this, you repay your existing loan with a new loan. So, the debt isn't cleared really, but you can obtain the new loan at a lower interest rate and you can extend the tenure too so that the EMIs become smaller. People also refinance their loans to change the nature of their loans. So, if your current loan's interest rate is a "floating interest rate" which means that it changes with the changing marketing conditions, then you can refinance a loan to get a "fixed interest rate".
If you are planning to refinance a loan, then be sure to keep the following in mind:
A personal loan for CIBIL defaulters is hard to get. Thus, you want to take as many measures as possible to avoid hurting your credit score. One of these can be activating the auto-debit feature. This will allow your bank to deduct the EMIs from your bank account automatically every month. Thus, you won't have to worry about paying the EMIs on time.
Sometimes, the simplest solutions are the best solutions. So, if you are having financial problems and there are personal loans to repay, then you can consider looking for part-time jobs that can augment your income. In fact, there are numerous opportunities on the Internet alone. There are many freelancer websites where you can earn money by using your skills which could be writing, video editing, graphics designing, etc. Otherwise, you can also look for opportunities at your full-time job. If there is additional work, then you can volunteer to give more hours to the company for additional income.
If even after your best efforts, you aren’t able to prevent defaulting on a loan, there is no need to panic. Many people default on personal loans every year and most of them are able to reverse the damage by taking the right steps.
If you have defaulted, then you can make up for it by saving up money and repaying the balance amount as soon as possible. It's possible that your bank offers a "settlement" option which is an easy way out from the predicament as you have to pay only a portion of the actual debt. However, this option can do massive damage to your credit score and must be avoided. Instead, you should try to talk to your bank and explain your situation. Let them know that you intend to pay the full amount.