There can be various reasons for an individual to take a loan. However, there is always a possibility of encountering a few uncertain situations, which might lead to substantial overdue payments towards these loans. Here, it is essential to understand that skipping EMI payments can multiply your financial liabilities substantially. And, the prominent reason for this exponential spike in overdue payments is the cascading effect, where an individual has to pay additional interest on the already existing interests. Subsequently, the overall interest starts to surge into a massive amount. In such cases, the best way to manage your debts is by consulting renowned lenders and their loan options and such is Fullerton India’s personal loan.
What are the Consequences of Default?
Ideally, there are two primary consequences that a person faces when he/she fails to repay a debt:
- Your credit score will be affected adversely. All the credit-related data of the credit card users and loan owners are delivered to CIBIL as well as other credit rating companies. And as each loan application needs a credit score reading today, the chances of your application approval remain intact only if your credit history is favourable. In case of default, your credit score rating will fall, which, in turn, will make obtaining a loan difficult in the future.
- The property that was utilised as collateral while you took the loan could be repossessed as well as auctioned later by your lender post a legal process.
How Can a Personal Loan help Clear your Overdue Payments?
A personal loan can help you clear your overdue payments. Let us take a look at how the loan can benefit:
- Get a Loan for the Exact Default Amount
You can get a hefty amount for clearing the overdue payments when you apply for a personal loan. Subsequently, this loan amount can be used to pay off all your creditors, along with the long-term loans. It is the best opportunity to redeem your financial situation, as a personal loan of up to Rs. 25 lakhs can be obtained to pay off the outstanding debts.
- Minimum Documentation
There is always additional pressure on an individual to arrange various documents when it comes to obtaining a loan. But, that is not the case when it comes to a personal loan. On the contrary, the sole purpose of introducing personal loans was to bridge the gap between the customers and the required money by eliminating the time-consuming documentation procedures. Most NBFCs these days need only primary documents of proof that signify your permanent address, Return of Income (RTIs), PAN, electricity bill, telephone bill, salary slips, etc. You should keep a record of such documents so that you can present them to the lender when needed and speed up the process of acquiring the personal loan.
- Quick Disbursal
There is an old saying ‘Desperate times call for desperate measures,’ and this is more apt when you are seeking financial help during a situation of constraint in time. There can be nothing more overburdening than getting a reality check from your creditors when you don’t have enough funds to repay the due immediately. However, with the help of a personal loan, you no longer have to worry as it doesn’t take much time for the lender to disburse the loan amount into your account. Once you submit all the required documents and fulfil the standard eligibility criteria, you will get the personal loan sanctioned instantly, and the disbursement will take nearly 24 hours.
- Flexible and Affordable:
The repayment tenure of personal loans can be stretched up to nearly five years, which is why they are known to be the most flexible loans in the financial market. Further, the interest rates are also quite affordable, so that you can repay all the EMIs, without taking the additional burden of paying overwhelming interests. However, it is always recommended to use a personal loan EMI calculator before selecting any particular scheme, as the calculator helps assess all the interest rates and choose the convenient one. Therefore, affordability and flexibility make personal loans the most effective option to raise funds for clearing overdue payments.
To conclude, it would be best for you to control your expenses as well as prioritise significant and non-significant spending to regain your financial health. Make a list of all the overdue payments to identify necessary payments that need to be made in a special order, using the acquired personal loan.