There are a lot of borrowers who are elated when their loan application gets approved. But at that moment, they sometimes tend to forget the impact that it will have on their financial future. Strong financial discipline is required when planning to repay your loan. It is important to keep your financial condition in mind and stay in control of the personal loan. Here are a few tips to help you manage the loan.
Do not miss an EMI
After the loan is sanctioned, it is important to make the EMI payments on time to boost your credit score. Any default or delay in the payment will pull down the score and you will end up paying a penalty. When you miss payments consistently, you will be labeled as a defaulter and could be blacklisted by the lenders. This is why you need to pay the EMI in full and avoid any penalty charges.
Make a prepayment
If you have excess funds on hand, it is advisable to make a prepayment. It will help save the interest cost on the loan. If you receive a bonus or a higher return on investment, use the funds to prepay the outstanding loan. You need to ensure that the savings in interest exceed the prepayment charges of the loan if there are any.
Keep the emergency fund intact
It is not a good idea to use emergency funds to pay for the loan. The purpose of the fund is to help you in case of an emergency situation like an illness or a loss of a job. You need a fund, which is five to six times your monthly expenses, and this fund should only be used in case of an emergency.
Do not take another loan
If you already have a Bajaj Finserv loan and you take another one, it will only increase your financial burden. You should not take a new loan when you have not closed the old loan yet. Every loan will come with an interest attached and it will bring down your credit score if you default in the payment of the same. Always close the old loan before you plan to take a new one.
Choose balance transfer
After your loan has been approved, you need to keep a check on the offers from different lenders. When your current lender refuses to reset the rate of interest, you can transfer the outstanding loan balance to a different lender who offers a lower interest rate with better terms and conditions. This will help you save on the total amount of interest you pay over the tenure. Always consider the cost involved before making a decision.
Take an insurance
When the loan is of a large amount, it helps to buy an insurance cover so that the burden of repayment does not fall on your family in case of an untimely death. You can opt for an insurance plan, which will give you an insurance equal to the outstanding amount at the time of a mishap. The life cover should be about ten to 15 times of the annual income. An insurance cover will save your family from getting into any sort of financial trouble in your absence.
Keep these six tips for loan in mind and ensure timely repayment of the outstanding loan amount. Getting a loan approved might be easy but it is important to ensure that you pay the loan in EMIs over its tenure and do not default or delay the same otherwise it will harm your credit score.
Applying for a Bajaj Finserv loan with Finserv MARKETS is easy, convenient and completely hassle-free. What’s more? You can avail a host of other features and benefits right from the comfort of your home. So why wait? Avail a personal loan with us, today!
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