25 Oct 2020 | 5 min read
You would always want to put your money towards some important things like groceries or paying your electric bill, etc. instead of paying a high-interest rate on loans. A high-interest loan makes it difficult to save money for a secure future. But as the saying goes where there’s a will there’s a way. So, if you're looking for ways to save money and secure future with interest-saving loans, then you are at the right place as here we have provided some ways to save money on loans. So, keep on reading and know how you can save your money for a secure future.
Three ways can be used to save money and those are:
A balance transfer is a process that involves a customer transferring his/her outstanding loan amount from one lender to another one (offering a lower interest rate on the outstanding loan amount). A balance transfer process does not require any security to be provided to the lender. However, this process may involve certain foreclosure charges that are levied by the current lender.
Let’s take an example to know how a balance transfer helps in saving money:
Suppose, you have a personal loan for Rs. 2, 50,000 for repayment tenure of 3 years at a 20% p.a. rate of interest , and your monthly EMI comes to Rs. 9,291. The total interest you would pay for the period of your loan will amount to Rs. 84,472. If after 1 year you opt for a balance transfer and the interest rate is now reduced to 14%, the principal outstanding on your loan is Rs. 1, 76,299. If the balance transfer of the outstanding amount is rounded off to Rs. 1, 80,000, the monthly EMIs will drop to Rs. 8,642 while the total payable interest will go down to Rs. 27,416. For the first year, you would have paid back Rs. 44,039 which meant another Rs. 40,433 was remaining. But with a Personal loan balance transfer, you will have to pay an interest of at Rs. 27,416, that means a saving of around Rs. 13,000.
Here are few other benefits of Balance Transfer
A top-up loan is an option that provides you with the opportunity to apply for additional loan amount top-up amount in your already existing loan amount. As the need for extra funds can arise at any time. Those who already have a loan and always repay on time can opt for this option. Not only this, but it also helps in saving money on loan, let’s understand it with an example.
Let’s take an example to know how a Top Loan can help in saving money:
Suppose your bank has approved a personal loan of Rs.25 lakhs for 5 years at an interest rate of 11% and now you need extra funds and your bank is offering top-up loans at 9.60%. Then you think about it yourself which will help you in saving money going for a fresh loan coming at 11% or top loan at 9.60%.
A personal loan is a collateral-free loan offered by the banks or NBFCs to meet personal needs. It can be used to meet any financial purposes like to meet unexpected expenses or any other requirements, they can also help you save money. Yes. If you used it properly, a personal loan can help you save money in several ways. Some of them are given below.
Benefits of Personal Loan
These are some ways that can help you to save money and secure the future. However, which one is the best is completely based on your requirements as each has its own benefits. We hope that this blog has helped you with what you were looking for.