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How to Balance Financial Freedom with Responsible Borrowing
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Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.
Success
Failure
Timely management of existing debts and other financial burdens is essential to avoid negative impacts in the long run. While additional borrowing in the scenario of current debts might seem an illogical option, do re-think! The option of borrowing finances with a strategic approach to repaying debts and obtaining funds can offer assistance in finance management. Learn more about how it helps with this article on how to deal with the tricky tightrope between enjoying the benefits of borrowing (like buying a home or funding your education) and staying firmly in control of your finances.
Achieve Financial Freedom with Personal Loans
Here is how responsible borrowing and finance management can take off the burden:
It is one of the methods used to aggregate existing balances. Here, the new loan can be used to pay off multiple high-interest debts through one EMI. It simplifies the cash flow and lowers the credit utilisation ratio. Further, it may also be a low interest Personal Loan for smooth payback. Additionally, it gives you the time and flexibility to improve your budget.
Investing in the obtained Personal Loan in such a way that allows better and improved financial incomes can contribute to achieving financial freedom. The utilisation of the amount for educational purposes, skill enhancement, starting a small business or other such endeavours can lead to increased earning potential. Such responsible borrowing will help with financial stability and create opportunities for wealth accumulation.
The finances borrowed from banks can be used as an opportunity to enhance the credit score. With Kotak Personal Loan, you get flexibility in terms of repayment with a tenure of up to 6 years. You can use Personal Loan EMI Calculator to help with proper assessments of monthly instalments. It, in turn, will allow timely payments and improve the credit profile in the long run. The loan can also be demonstrated as an effective proof of financial knowledge and management abilities. Further, the improved score can be used to obtain low interest personal loans when required later in life
Tips for Wise Debt Usage
Financial freedom can be more effectively achieved with mindful cash management obtained through borrowing. Here is how you can achieve the same:
You must bel aware of the specifications of existing debts. It includes insights on how much you owe, the deadline, interest rates, EMIs and other aspects. It helps you understand your current stand and what you need to get out of the debt.
With information on the existing status, as a borrower, you must pay back the debts with high interest rates. Paying them off allows savings on large expenditures made on interest rather than the loan.
One of the most important points to not ignore while borrowing finances is planning. You must have an exact idea of how much cash will be allocated to which debt and for what usage. Also, an effective plan should be made to cut expenditures whenever and wherever possible.
While you must have clear information on how the new borrowing will be utilised, you should also know if you actually need to borrow or not. Seeking guidance from financially expert individuals regarding possible options is recommended. Thus, avoiding piling up unnecessary or hard-to-manage debts.
Don'ts for Borrowings
For effective usage of newly obtained funds, here are some things to avoid completely. The list is as follows:
Summing Up
Financial freedom is a must-have for every individual to live a sound and happy life. While the situation of multiple high debts is common, there is nothing to panic about. There are multiple methods to handle the same, including borrowing additional money responsibly. This can be strategically used to pay off existing debts while being repaid in affordable instalments over time.
One effective way to achieve financial relief is through Kotak Personal Loans, where you can access up to ₹35 lakhs at competitive interest rates starting at 10.99%. With flexible repayment terms of up to 6 years, you can choose a plan that best suits your financial situation.
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