Personal Loan: 4 key advantages of setting automatic payments

livemint.com:

Automating your personal loan payments is an excellent method for simplifying your finances and efficiently managing your debt. There are several advantages to setting up automatic payments for your personal loan:

Debt consolidation can also positively impact your credit utilisation ratio, which is another crucial factor in determining your credit score. This ratio compares your total revolving debt (such as credit cards and lines of credit) to your credit limit. By paying off high-interest credit card balances with a personal loan, you’re likely to reduce your overall credit utilisation, potentially giving your credit score a boost.

Here are a couple of points to remember:

When you merge debt consolidation with automatic payments, a structured budget, and a robust emergency fund, you can attain a heightened feeling of financial security.

The following steps will help you estimate how much personal loan you can comfortably afford:

Deciding between prioritising a lower interest rate or a shorter loan term for your personal loan hinges on your financial objectives and preferences. Here's an analysis of the advantages and drawbacks of each option to assist you in making a choice:

Consider these additional factors in your decision-making:

Strive for a balanced approach, seeking a loan with a competitive interest rate and a term that aligns with your budget. This strategy minimises interest costs while ensuring a reasonable timeframe for debt freedom.

Personal loans commonly entail various fees alongside the interest rate applied to the borrowed sum. Below are some typical fees associated with personal loans in India:

This one-time fee, levied by the lender, covers the processing and initiation of your loan application. It