Common people have to take personal loan along with it in case of emergency. More trouble increases than this. So, let us find out which one should be settled first if you have home, car and personal loan.
This is seen many times when a person has more than one loan. Many salaried people take more than one loan to meet their needs. Most people can have home and auto loans together at the same time. Many salaried people pay the EMI of both at the same time. Many times family or common people have to take personal loan along with it in case of emergency. More trouble increases than this. So, let us find out which one should be settled first if you have home, car and personal loan.
look at the interest rate
According to experts, when you have more than one loan, the one with the highest interest rate should be repaid first. This is because the cost of interest goes on increasing your loan. Generally, personal loans carry an interest rate of 10 to 15 per cent. At the same time, the interest rate in auto loan is 8 to 12 percent. Whereas, home loans are available with an interest rate of 6 to 12 percent per annum.
In most of the cases, the highest interest rates are available in personal loans. Personal loans are unsecured loans and depend on the credit history and repayment capacity of the individual. By eliminating this, surplus funds will also be available with you.
Which asset will increase in value over time?
After this, focus on repaying the auto loan. Because now it can have a higher interest rate. Also keep in mind that the value of a vehicle tends to depreciate with the passage of time. So the sooner you deal with it, the better.
On the other hand, home loans generally have the lowest interest rates among all these loan types. Apart from this, you create such an asset, which you can leave for your next generation. Not only this, its value increases with the passage of time. Does not keep decreasing like a vehicle loan.