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    Maneet Anand

    Losing your job suddenly (without any warning) can lead to lot of financial burden, considering you have a personal loan to pay off. And, if your personal loan is a secured loan (as most personal loans are), failing to pay it off in time can lead you to lose your collateral or asset to the bank. Hence, you need to plan ahead by taking following steps to be able to chart a plan to pay off your personal loan.

    • Take stock of your debt- List all your other debts like car loan, credit card payments, utility bills, etc. along with personal loan to get a clear picture of where you stand in terms of how much money you need each month to sustain.
    • Claim on insurance- Ask the lender, if your loan is covered by payment protection insurance (PPI) or short-term income protection (STIP) insurance. Payment protection insurance (PPI) will cover some or all of your loan or card repayments for up to 12 or 24 months.Short-term income protection insurance will replace a proportion of your income for up to 12 or 24 months.
    • Prioritize your expenses, especially repayments- Things like credit card bills, unsecured loans, bank overdrafts and catalogue debts are classed as non-priority debts.The consequences for non-payment of these aren’t quite as great. The companies you owe can’t take your home. Hence, prioritize!
    • Work on a budget- Make a budget and stick to it.
    • Start paying for the loan as soon as possible- After doing all of the above, start paying off your loan little by little, but as soon as possible. As any delay will not only impact your credit history, but also increase the loan amount by compounding rising amount of interests.

     

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