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Below are key tips to manage your travel loan repayments:
Create a detailed budget
The first step in managing any loan repayment is knowing where your money goes.
“It is important to create a detailed budget that accounts for all monthly expenses to ensure there are enough funds available to pay down debt,” advises Rishabh Goel, Co-founder & CEO of Credgenics.
This approach ensures that you are financially prepared for loan repayments, making it easier to stay on track.
Cut unnecessary expenses
Once your budget is in place, it’s time to cut back on non-essential spending.
“Cutting unnecessary expenses and prioritising paying down debt can also free up excess cash flow,” says Goel.
Consider refinancing or consolidating loans
If you find your monthly payments to be too high, refinancing or consolidating your loans could be a smart move.
Goel recommends, “Refinancing or consolidating loans with a lower interest rate can help reduce monthly payments.”
Lowering your interest rate not only reduces the financial strain but also makes it easier to manage your loan over the long term.
Contact your lender early
If you find yourself struggling with repayments, don’t wait until it’s too late. Early communication with your lender can open up more options for you. “If repayment is difficult, borrowers should contact their lender early to explore options, such as extending the loan term or adjusting the repayment schedule,” Goel advises.
Set up automatic payments
Setting up automatic payments is also a good practice to avoid missed payments and possible penalties,” suggests Goel.
Automating your payments not only helps you stay on top of due dates but can also prevent unnecessary late fees from accumulating.
Plan ahead before taking out a loan
Preventing repayment problems starts before you even take out the loan. Goel emphasises the importance of careful planning.
“Creating a realistic travel budget to avoid borrowing too much and considering other financing options, such as savings or low-interest credit cards, can reduce reliance on high-interest loans,” he says.
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