In India, aspirations are more precious than anything else. Debt, in any form, helps you fulfill your financial goals faster than you possibly can. However, when the accumulated debt crosses your repayment capability, it becomes a debt trap. And usually, the more people wish to come out of a debt trap, the more they get entrapped.
This article contains the professional tips you need to come out of a debt trap with a mortgage loan in India.
Identify High-Interest Debt and Close It Earlier
People usually enter a debt trap by accident and find it difficult to get out of it. If you want to reduce your debt, identify the loan or credit card that charges the highest interest rate. If you own a credit card with a high APR or Annual Percentage Rate, you should close it earlier. In case your funds are not enough, you can apply for a mortgage loan in India. Since mortgage loan interest rates are lower than other loans in India, many people prefer applying for the loan to clear off existing debt. Mortgage loans are limitation-free loans that a borrower can spend for any purpose. Hence, a mortgage loan in India can give you low-interest funds that you can use to clear the high-interest debt and be debt-free.
Transfer Your Balance
A mortgage loan in India is a flexible financial instrument that offers unparalleled benefits, of which balance transfer is the most exciting. The balance transfer facility is available to those borrowers who have a mortgage loan in their debt portfolio. To get the benefits of a balance transfer, you should first find a lender offering the lowest mortgage loan interest rates in India and apply for a loan. Once the lender accepts your proposal, you need to close the existing loan and transfer the principal to the new lender. The balance transfer facility can result in substantial savings if you find the right lender and may enable you to come out of the debt trap.
Modify the Loan Term
Another excellent way you can come out of a debt trap is by modifying the loan term. Generally, mortgage loans in India come with a maximum tenure of twenty (20) years. If you want to reduce the interest rate, request the lender to decrease the term. Alternatively, you can prepay a part of the principal and reduce the interest. However, when you want to reduce the EMI amount, you should request a loan term extension. Hence, whatever your needs, a mortgage loan in India can help you with affordable payment plans and an appropriate loan term.
Change the Interest Type
Borrowers often prefer the fixed rate of interest over the floating rate. However, when you are on a fixed-rate regime, you do not receive the benefits of an interest rate reduction. In such cases, you can change the interest type by paying a small fee. In India, lenders offering mortgage loans do not charge any prepayment penalty when they are on the floating rate of interest.
Read Loan Terms Carefully Before Signing The Application Form
Borrowers frequently make the mistake of signing a loan application form without reading the terms. Many reputed lenders like PNB Housing Finance provide the ‘fee and charges’ list on their website, making it convenient for borrowers to understand the loan costs. However, when you choose the wrong lender, you may have to pay more than you estimated during the loan application. Hence, before accumulating debt, you must analyze the costs and sign accordingly.
In India, coming out of a debt trap is not a problem, since mortgage loans with attractive interest rates are available at a click of the mouse. Avail of a mortgage loan in India and use the loan amount to settle your existing debt. While the mortgage loan takes care of your debt, you can conveniently pay one EMI to be financially free.