29 December 2023
A Line of Credit (LOC) can be very useful for those who need quick access to funds for their expenses. With a credit line, you can make multiple withdrawals up to a predefined amount whenever required. This proves to be more effective than taking a loan since the interest rates offered by banks for lines of credit are usually lower than the rates charged on loans.
Now, while credit lines can be a boon, it is also essential to focus on repaying this debt promptly to avoid any financial hassles in the future. If you are wondering how to pay your line of credit dues sooner, take a look at the following tips that could help in doing so.
1. Set a budget and stay organised
Handling your income and expenses without working on a proper budget can lead to difficulties in clearing any debt obligations. Make sure to categorise your monthly expenses, outline your fixed and variable costs, and then allocate a specific amount towards making your LOC payment. Being consistent while following a budget can help manage your finances effectively while clearing off your dues.
2. Cut down on your spending
When you have outstanding debt, every rupee of your income counts. Focus on cutting down your expenses, especially on those categories that are not considered essential. Maintain a spending limit for entertainment, groceries, travel expenses, etc. This will leave more room towards clearing your line of credit dues.
3. Try and increase the monthly payments
Once you cut down your spending, you will have more funds for accommodating higher monthly instalments. Once you increase your monthly payments, it will help accelerate the repayment process and you can get debt-free sooner. If you have a line of credit via IndusInd Bank’s INDIE app, you can choose a flexible repayment schedule that works at your convenience.
4. Avoid using your credit card
Using a credit card smartly can bring about a lot of benefits. You can take care of the expenses at hand with your credit card and only worry about clearing the card’s bill at its due date. However, when you have outstanding debts, it is advisable to put a halt to using your credit card for expenses. This is because using your credit card would simply add to the debt, lowering your financial capacity to tackle your LOC dues.
5. Use your bonuses towards clearing your debt
Getting a bonus from your company is indeed a proud moment and something that should be celebrated. While there is nothing wrong with spending your bonus for your loved ones, if you have a goal of clearing your line of credit, consider using that towards paying off your dues. Any earned bonuses or incentives being used for clearing your outstanding debt will help speed up the process of credit repayment.
6. Avoid taking on more debt
While you might be eligible for a loan, it is advisable to hold off on taking more debt while already having outstanding dues that are pending. This is because doing this would only lower the available funds that you can use towards clearing the existing dues on the line of credit. Also, you need to factor in the possibility of facing a financial emergency, in which case you might need funds at hand to deal with expenses.
Ending note
The above-mentioned tips should help with clearing your line of credit sooner. Since a line of credit is a type of revolving credit, the moment you pay back all your dues, your entire line of credit limit will be restored, which you can use for future expenses and emergencies. Hence, the sooner you pay off your line of credit dues, the sooner you have the entire approved limit at your disposal again.
