If you have taken a personal loan and are facing trouble in repaying your monthly installments, then you must keep few things in mind to prevent the loan from becoming a bad debt.
You can use assets such as car, life insurance policies, bank fixed deposits, shares, etc to monetize and use the return to pay off your personal loan EMIs. You can also work out a plan with your lender on restructuring the loan to smaller EMIs and greater tenure. Plus, you can seek EMI holiday for few months in case of genuine reasons such as unemployment or health issues. Further, you also have the option to take a loan from your friends or family members to pay off your few EMIs. It is the best option in case you are unable to secure urgent cash. Lastly, you can also opt for a one-time settlement. This option is generally exercised when you are unable to repay the loan to the extent that your interest accrued is larger than the principal amount. In such situations, the bank may give you an option to settle the loan through a small payment. So, if you follow the above-mentioned tips, you can prevent yourself from getting into a debt trap.
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