Clear off your debts with year-end bonuses!!

29th October 2015


In today’s financial climate, Pakistani consumers, especially salaried individuals are balancing their expenses by availing short term personal loans, cash-lines and outrageous balances on their credit cards. However, as the year-end approaches, most individuals would be awarded with annual bonuses and compensations for their performances. Now would be a good time to start clearing off your debts and begin with a clean slate in 2016. Here are guidelines on how to clear off your debts and plan for the coming year.

  1. Firstly, use your bonus amounts to clear off your debts on your credit cards. In Pakistan, credit card balances carry the highest markup. Clearing off outstanding amounts on your credit cards will increase your monthly take home income.
  2. Secondly, clear off your debts on your cash-lines. All running finance facilities charge daily markups to consumers. Zeroing out the balance on your cash-line will further reduce your monthly debt servicing costs.
  3. You can clear off your debts on personal loans only if the tenure availed is less than one year. For personal loan repayments, markup recovery is highest in the first two years. The outstanding principle amount, if cleared within the first year only charges upto 10% penalty. If you clear off your debts on personal loans within the first year, you can save up on markup costs for the remaining tenure.
  4. Lastly, it is not possible to clear off your debts on auto loans after adhering to all the aforementioned guidelines. However, balloon payments can be made to reduce the outstanding balance on your vehicle and reduce monthly installment amounts.

Although, most individuals prefer to save their bonus amounts, or have already planned its usage for the following year, we, at MyBankersOnline feel that if you clear off your debts, you can better manage your finances in 2016 and reduce the burden on your wallet due to markup servicing costs.


By Saad Niaz


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