Contents
What Is Loan In Simple Words?
In simple words Lending money by another person to another person for a particular period of time is known as Loan. But one has to pay some extra money while returning the loan which is basically called interest.
Who Can Take a Loan?
Anyone who needs money can take a loan basically individual or big organization takes a loan for their work. Note that there is a procedure for taking a loan with lots of terms and conditions. So one should go through it properly.
Main Popular Reason Behind Loan?
The main popular reason behind the person taking a loan for a dream home, an education loan, and a car there are lots of reason why many people take a loan but this is the main popular reason that one wants to take a loan to fulfill these all need.
Why Clear Loan Before Time?
Some of the reasons why one should clear the loan before the time is as follows:-
- It will release the pressure on loan
- You can save more money if you clear the loan before the time
- It will boost your confidence
- You can save lots of interest rates.
How To Pay Off A High-Interest Loan Quickly?
The two practical and easy ways that one can pay off a high-interest rate loan quickly I am providing below 👇🏿
- Pay extra EMI every year. By doing one can save lots of money.
- Increase the EMI rate which will help you to reduce the tenure period and interest rate also.
The fun fact is that if you pay one extra EMI every year and increase your EMI interest by 5% you can save at least 50% of the interest rate.
If You Pay Off A Loan Early Do You Pay Less Interest Rate?
Yes, it is possible if you pay off a loan early you will pay less interest rate. Because if you want to pay the loan early you have to increase the EMI so which will directly or indirectly reduce the tenure period and that will help you to pay a low-interest rate so like this you can save lots of money by paying early.
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FAQ
Is Loan Bad Or Good?
The loan can be good or bad it will totally depend on the person if the person is taking the loan for education then it might be considered a good loan but if the person takes the loan for a personal loan such as jewellery for that purpose that loan will fall under the bad loan.