Struggling with high-interest personal loans? 6 expert-backed steps to regain control

Amid a tighter monetary environment globally, personal loan borrowers are contending with elevated interest rates. That is why irrespective of your planning a new loan or struggling to manage an existing one, staying updated and informed about the current rates and repayment strategies is extremely important.

On the issue of managing high interest personal loans, Manish Goyal, Chairman & Managing Director, Finkeda said, “Controlling high-interest personal loans begins with knowing your financial situation. Rank loans by interest, develop a practical payment plan, and skip new debt.”

He further added, “Monitor spending intensely and put spare money toward high-interest loans. Refinance or consolidate if feasible. With self-discipline and a focused plan, you will be back in control—a step at a time. Local planning and smart decisions do it all.”

Note: Rates are indicative in nature and subject to change based on the applicant’s credit profile, loan amount, and tenure. Please check directly with the bank for personalised offers.

It is also crucial to acknowledge the fact that borrowers with a strong credit profile can often secure better terms and easier interest rates by comparing pre-approved loan offers on different digital lending platforms. Several such platforms also provide zero processing fee options.

6 practical steps to tackle high personal loan interest

Step 1: Assess your financial position

To begin you must carefully evaluate and analyse your income, expenses and existing debt obligations. This will help you in understanding your repayment potential along with identifying financial gaps and some glaring mistakes you are making while managing your finances.

Step 2: Explore loan consolidation

Focus on merging several different high interest loans into a single loan with lower interest rates. This concept is known as loan consolidation. It helps in simplifying EMIs and can bring the overall interest outgo lower if planned efficiently.

Step 3: Negotiate with lenders

Having a fair and honest discussion with your lender can foster better relations. You can request your lender to provide you better terms and regulations on your loans. Such as a lower interest rate, a seamless repayment pattern, a longer tenure or switching from a floating interest rate to a fixed interest rate.

Step 4: Seek professional advice

If you are still in doubt with regards to the planning, repayment structure, loan tenure along with how to manage your overall debt obligations etc. Then in all such cases it is always advisable to discuss your problems with a certified financial advisor. A professional will help you make a well considered decision.

Step 5: Set up an emergency fund

When you start saving for the future, first build a reserve covering three to six months of your expenses. This will prevent you from falling for the trap of borrowing immediately if a sudden emergency pops up. Emergencies such as medical procedures, accidents etc.

Step 6: Monitor your credit score

Maintaining a clean and healthy credit profile is extremely important. As a high credit score boosts your chances of securing a lower interest rate loan or a premium credit card smoothly. You should also pay your EMIs and loan repayments on time to make sure that you avoid high credit utilisation.

Therefore, in a high interest environment, properly managing personal loans can boost your financial health, credit profile and overall peace of mind. These simple practices can also ensure that your credit behaviour remains clean. That is why a well informed loan borrower is always in a healthier position to save for the future.

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