Which Loan Should You Close First?

It is always wise to close down your high-interest loans first:

• credit cards
• personal loans

are high-interest loans that you should close down first. Secured loans like home loans or vehicle loans can wait.

Borrowers usually assume that paying off the largest loan is prudent but it is actually not. These secured loans come with low-interest rates and don’t eat too much in terms of interest. But credit cards and personal loans usually come with 2-digit interest rates that are not good for your financials.

While closing down these loans, pay attention to pre-closure or part payment charges so that you can make the best decision.

Smart Tips to Reduce your Loan Burden

Remember to keep your repayments regular. Whenever you come across that annual bonus or incentive, invest it against the loan to reduce your interest burden. If you feel that the interest rate is very high, negotiate with the lender to reduce the interest rate or go for a balance transfer to a different lender.