Heyy, what is going on guys? Rishabh is here back with another awesome post “How to pay off your debts”?Everyone wants to pay off their liability or loans as soon as possible but they have no idea how to get rid of their debts faster? Due to lack of calculation and due to lack of financial planning businessman of our country have been trapped in loans.which results in hypertension, stress, depression and they lost their barrier-free thinking.To become happy you don’t need a piece of finance, you need financial peace, So today I will suggest you some tips that help you to get rid of their liability faster.
TIPS OR WAYS TO GET RID OF LOANS:-
List your debt by interest rate
If you genuinely want to pay off your loans faster, then firstly rearrange your loans according to their interest rate sequence. Those debts whose have more interest rate than others, then pay off them firstly. Most of the peoples make the same mistake of paying equal EMIs on all loans, but this is the worst mistake which all we have.Those debts whose interest rate is minimum then you have to pay them less EMIs on it.
Let’s take an example of interest rates-
- Home Loan-8.3%,
- Car Loan-9.0%,
- Education Loan-10%
- Personal Loan-12%
- Unsecured Loan-20%
- Credit Card-32%
Pay incremental gain exponential
After rearranging the debts according to their interest rates.you got the idea which loan you have to pay earlier… like in our example if anyone has to pay the debt of credit card and car loan then he has to pay the credit card debt firstly because the interest rate of credit card is more than a car loan.Now we will discuss on incremental and exponential. As all, we know if we pay the huge the amount of our salary on the payment of loan then the loan pays off earlier.
Let’s take an example:- If our EMI is rupees 5000 and time taken for closure 41 months then the total amount which is paid by us is 2,05,000
If I just double the amount of EMI 10,000 so, it means the amount is double and the time taken for closure is just only 13months and the total amount is rupees 1,30,000, Double payment gives the 2times benefit.
Only wise man can be purchased Appreciating assets and depreciating assets or liability are purchased by the man of low intelligence. All we know appreciating assets like land, which increases the value of our money by increasing its value.If you want to pay off your debts faster then invest in appreciating assets in the place of depreciating assets.And also try to reduce or evaluate gratification expenses, dine out expenses, entertainment expenses, nonvalue-adding objects.which helps you to reduce your expenses and helps to get rid of loans.
Pay loans with the second income
If we have the second income then we can pay our loans faster.Now, women are independent and self-employed which helps the husband to pay their debts faster by the help of second income.which is earned by their wife.but in the case of the only husband are employed then he can also be planned to earn second income by doing freelance photography, content writing, part-time teaching, LIC agent and so on.