To repay the loan, you can take a loan against bullion and jewellery. Gold is considered to be the best means of investment, so one can take a loan at the rate of 8-9 percent. However, you have to look at the hidden charges on the gold loan. Somewhere the rate of interest should not be higher later.
If the financial situation is critical, there is a shortage of money and if the burden of EMI of loan or policy etc. is on the head, then it can become difficult for you. In principle, it is not advisable to hold any kind of EMI as it increases the interest burden. The burden of interest more than the amount of the loan bothers. In such a situation, one should consider ways by which money can come in the pocket and EMI can be paid from it. Let’s talk about some such methods here.
1-Insurance Policy
If you have taken your old-fashioned insurance policy, have bought a traditional plan, then it does not seem to provide much benefit. Low returns are available on such a policy. Usually returns are given at the rate of 5-6 percent. The insurance cover is also not very much. In view of this, such a policy can be surrendered. With this you will not only get cash, but you will also get rid of EMI.
2-Fixed Deposit
The rate of interest on fixed deposits has dropped significantly. Now as much return is not available on FD as before. After putting the money received after retirement in the tax bracket of 30%, the benefit has come down even further. On fixed deposits, in the end, money comes in hand only at the rate of 4%. It would be better to withdraw the FD money and repay it in the repayment of the loan in which 9-10 percent interest is being charged.
3-Debt Funds
The inverse effect of rising interest rates is visible on debt funds. Due to the increase in the interest rate, the returns of the debt fund will be taken down to less than 5-6 per cent. It may happen that redeem the debt fund and use the money to repay the loan. This method can reduce your debt burden.
4-Stock and Equity Funds
The movement of the market is looking good now but it will remain golden in future too, can’t say that. If there is a partial gain in stock and equity funds, then sell them and pay off your outstanding loan.
5- Loan from PPF
If you have PPF scheme then you can take loan on it. It is easy to take a loan on the PPF balance at the rate of 1% interest. This type of loan against PPF can be taken for 3 years. This 1% loan can be used to repay a loan like 10%. If you do not repay the PPF loan in three years, then interest will be charged at the rate of 6%. Even so, it can be considered better than other loans.
6-Loan Against Insurance Policy
If you do not want to close your traditional insurance policy, then you can take a loan on it. This will also work. LIC offers loan against insurance at the rate of 9%. But the loan will be available on the same policy which has come under the purview of paid up value.
7- Loan Against Car
If you have not taken any loan on the car before, then banks can give loan against it. For this, you will have to talk to the bank. Banks charge 12-15 percent interest on the car. But the condition of the car should be good, the car should be in good condition. The car should not be older than 5 years, only then the loan will be available.
8- Loan Against Gold
To repay the loan, you can take a loan against bullion and jewellery. Gold is considered to be the best means of investment, so one can take a loan at the rate of 8-9 percent. However, you have to look at the hidden charges on the gold loan. Somewhere the rate of interest should not be higher later.
9- Loan Against Property
The best way is to take a loan against property. If there is a cash crunch, you can repay the rest of the loan by taking a loan against the property. If you take a loan by making the property collateral, then the interest on it will be less. The loan money can be used to repay an expensive loan.
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