A personal loan is your financial savior in case of any urgent capital crunch. Unlike most loans, a personal loan is an unsecured type of loan. Thus, a borrower need not provide any collateral against it, as a form of security. Moreover, the loan can be availed for any personal reasons such as, paying medical bills, redecorating your house, or funding any grand event. Minimal documentation is required to process a personal loan application. As a result, these loans are in much demand in the financial market as compared to the other types of loans.
However, while it is extremely easy for most people to avail a personal loan, managing the personal loan EMI could be another matter. Most people get so caught up in their day to day lives that planning for their personal loan repayment sometimes become the least of their priority. However, this is not a good financial practice. Any negligence on your personal loan EMI payments can significantly impact your future financial planning and disrupt your budget. To avoid that from happening, here are few tips to manage personal loan EMI payments-
Check Your Repayment Capability
The first step towards efficient EMI repayment is to ascertain your loan repayment capability. Make sure you are well aware about the personal loan interest rate and loan repayment flexibility offered by the loan provider. This knowledge can help determine the EMI amount for the total loan tenure and better plan your budget. Moreover, these days, a lot of loan providers offer online personal loan EMI calculators. Borrowers can make use of these online calculators to instantly calculate the EMIs that they would have to pay against their personal loan. This can help in making better financial decisions for the loan repayment. Borrowers can also check whether or not they would be capable of paying the EMI amount for the loan tenure by making the use of these online calculators.
Ensure Enough Savings
For better financial stability, it is important that you have enough savings in your account. Suppose a scenario occurs when you are unable to pay your EMIs, these savings could come in handy for making the payments. These savings could be in the form of gold, stocks, fixed deposits, etc., which can be easily liquidated to cover your EMIs. Moreover, there is another benefit of having some savings. At times when a major part of your salary is going into your EMIs, and you face any urgent financial need (ex: paying for any medical expenses), these savings can act as a back-up option so that you do not have to compromise on your EMI payments.
Put Out Reminders for EMI Payment
To make sure that you do not miss on any of your EMI payments, it is important that you set-up monthly reminders to intimate you whenever the EMI payment date is due. With the help of these reminders, you can ensure that you have sufficient balance in your bank account for the EMI amount to be debited. Moreover, in case you lack the sufficient amount for your EMI, you can manage to gather the funds before time.
Budget Your Expenses
In ideal cases, your EMI amount should not exceed 50%-60% of your monthly salary. The said percentage range ensures that you can easily manage your other every-day expenses without any compromise. However, any EMI amount that takes up more than the above-mentioned range from your salary can put a significant strain on your monthly budget. Moreover, the demands you make, mostly compromise on your expenses. However, this does not mean that you have to compromise on your lifestyle. Although, it is advisable to cut back on any extravagant and unnecessary expenses while you are under a liability to repay a loan.
Maintain a Good CIBIL Score
A CIBIL score helps determine a borrower’s creditworthiness. It is a three-digit score that is a reflection of your past credit history. Generally, a score of 700 and above is considered as a good CIBIL score. Borrowers with such CIBIL scores can be easily granted a personal loan. Moreover, with a good CIBIL score, a borrower can also avail personal loans at low interest personal loans. A good CIBIL score also assures the borrower of your integrity. Thus, in case the borrower wishes to extend the EMI payment date or extend the loan tenure, the loan provider just might heed the request by considering the borrower’s past credit record and good CIBIL score.
Opt For Longer Loan Tenure
The loan tenure of your personal loan is inversely related to the EMI amount. Higher the loan tenure, lesser the EMI amount and vice versa. Thus, if you do not want your EMIs to become a financial burden in the future, you can opt for a longer loan tenure at the time of availing your personal loan. Doing thus could significantly reduce your EMI amount, making it better to manage your monthly budget.
Paying your personal loan EMIs is extremely important. Any default on your EMI payments could significantly impact the borrower’s credit score negatively. This, in turn, could damage the borrower’s chances of availing any future loans. Moreover, the borrower might also be legally bound to pay some late fees or penalties as per the agreement policy of the personal loan provider. Hence, it is best that, as a borrower, you carefully consider the above-mentioned tips to better manage your personal loan EMIs.
Whether you are salaried or self-employed, Bajaj Finserv MARKETs will help you solve all your financial woes by offering you best personal loan online. With Finserv MARKETS, you get personal loans up to INR.25 lakhs at zero collateral and assured flexibility in loan repayment. This flexibility makes repaying the EMI payments more manageable. Moreover, with Finserv MARKETS, you get the facility of Hybrid-Flexi personal loans that come with features like principal holiday tenure, flexible part-payment facility, and unlimited withdrawals. For more details about our interest rate of personal loan and eligibility criteria for a personal loan, contact us at Finserv MARKETS or download our personal loan app today!
Finserv MARKETS, from the house of Bajaj Finserv is an exclusive online supermarket for all your personal and financial needs. Loans, Insurance, Investment and exclusive EMI store, all under one roof- anytime, anywhere!