Festivals are a big part of Indian celebrations. It’s also the time when expenses shoot up for most of us. With Diwali around the corner, you must be ready to go on a shopping overdrive. However, there are chances that you are saddled with debts and EMIs at this point.
Here are a few tips that will not only help you deal with your debts but also help you manage personal finances effectively during festive season:
Timely EMI payments
According to Anil Pinapala, CEO & Founder of Vivifi India Finance, defaulting on your repayments affects your credit scores immensely. Events like bounced checks, delayed repayments etc. negatively impact your credit score.
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Timely repayment is the key to having a healthy credit score.
"If and when you postpone or make a late payment, it not only affects your credit score but also impacts your debt and most lenders impose a late fee or penal interest in case of delayed/missed payments," Pinapala told CNBC-TV18.com.
Pay in part or in full
A fair share of individuals consider prepaying loans in part or full whenever they have access to extra cash. But it is important to ensure that there are no prepayment penalties or you can always negotiate with your lender for a waiver or lower penalties for prepayment.
Go for debt consolidation
You can go for debt consolidation in case of multiple ones and avail low interest rates on high amounts, said Anand Punmiya, Board Adviser & Media Expert.
Debt consolidation refers to the act of taking out a new loan to pay off other liabilities and consumer debts. Multiple debts are combined into a single
Go for extra payments
If you have some liquidity, ditch the usual EMI concept and take advantage of prepayments. This will decrease the principal and interest amount, said Punmiya.
Compare finance offerings
Keep comparing offerings such as processing fees, payment terms, interest etc and buy within your means; at the same time, be on the lookout for special offers and discounts deals that are available in the market, said Pramod Kathuria, Founder & CEO, Easiloan.
Prudent spending during the festivals will make life less stressful for you.
