Loans provide financial stability in meeting several types of financial needs and it helps the individual to make their dreams come true with a variety of loans available in the market.

You can take personal loans, business loans, home loans and mortgage loans as per your needs. Whether you have a business loan in Delhi/NCR or a personal loan in the U.P., you need to explore the best ways of debt repayment so that you can easily get rid of financial stress. Taking loans doesn’t seem hectic but paying debts becomes a burden for many because it wents with interest rates. It differs from one bank to another. You can get many flexibilities from your bank in repayment of debts, but knowing several options to repay debts on time is very necessary these days.

Here, in this blog, you will learn several types of loan repayment options and choose the one that suits your needs:

Step-up Repayment

This option is very popular these days as it provides the flexibility of paying less at the initial stage of repaying your loan and the amount of EMI will rise as the tenure progresses towards the next to next stage. This option is mostly considered by new borrowers who have recently stepped into their career building. It provides an easier EMI repayment at the initial stage to new businessmen, entrepreneurs and new financial players which builds their confidence and satisfaction in this field.

Step Down Repayment

In this repayment option, you are required to pay a big amount at the start of your loan and it decreases as the loan progresses towards the final stage. Most businessmen and wealthy people choose this option to ease their later repayments. It provides them relief at a later stage.

Choose Lump-sum Repayment Option

In this option, the borrower chooses to repay the complete amount of the loan with interest in one go. They choose a specific time slot like before the start of the loan tenure or at the end. For instance, some things need lump sum amounts like construction materials for home building or furnishing or making a purchase of an item from the market.

Balloon Repayment

Balloon repayment is slightly similar to the lump sum repayment option where the borrower makes a big payment of their EMI with principal and interest rate in the form of the final instalment. This payment option is generally considered for a short span of time. Here, the final balloon payment takes place twice the size of the initial instalment which is paid at the last instalment.

Refinancing

This repayment opinion includes borrowing a new loan to meet the financial crunch or debt loads of the existing one. These days, refinancing is getting popular as people use the option to meet their expenses, especially for purchasing a home or vehicle of their choice. Whether you have borrowed a personal or a business loan in Delhi/NCR, you can choose to refinance your loans very easily.

Prepayment

Prepayment is the paying of your debts with interest before your tenure ends. If you have a big surplus, then you can easily choose this option as it helps you manage your financial condition. It enables the borrower to get rid of various financial issues by paying the total outstanding amount at the earliest stage. It helps the person to lower the amount of your loan. Certain banks and lenders levy prepayment charges and penalties, so it’s necessary to check whether your lender has a policy of prepayment penalties or not.

Post Payment

This payment option involves the procedure of payment of your outstanding amount after the loan tenure. You need to ask your lender or bank if you can do post-payment of your debts if they allow. You need to ensure everything is in detail.

Summary

There are various debt repayment options you can choose to get rid of financial stress. You can easily manage your finances by choosing your preferred repayment option.