No matter how hard people try but sometimes due to unforeseen circumstances, they end up paying their loans post the due date. Although late Loan repayment has a temporary effect, but over a period of time if a person is repaying the loan late, then that can spell trouble. Let’s take an example of home loans. If you pay your home loan late then there is a penalty which you have to pay, which in turn will affect your credit score.
Here we give you tips which will help you to retain the trust of the lender even if you pay your loans late.
Timely Payment – Payment of loans on time is not a problem for those who are salaried, as they get their pay on time. But what about those, whose income is generated in a longer period of time or those who work on project basis? If they share the details with their lenders, they can get a grace period of about five to six days. Even if the borrower uses this period on a regular basis, then it is generally not reported by the lender. You can also opt for Electronic Service Clearing (ECS) facility which debits your loan from your account.
Be aware of the details – It is very important that you know the details of your loan. You should be aware grace periods, penalty rates, interest calculation rates and many others aspects of repaying the loan. This will help you make informed choice.
Use of Credit Cards – One the most used and abused type of loans people take is in the form of credit cards. Since they understanding of how to use a credit card is limited, people usually end up having bad experience. However, if used judiciously and wisely, it is one the best way to build your credit score. Having a credit card history is a great way to keep that score. In order to do that you have to keep using the card on a regular basis so that you have a good credit score.
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