You can take out a personal loan for
several reasons like expanding your existing business, enhancing your home, having
a grand wedding, paying off credit card debts, etc. Applying for one is also
simple and hassle-free. If you fulfil the eligibility criteria and carry a healthy
credit score, you are guaranteed to receive an ideal scheme with attractive
rates. However, the catch here is repaying them on time. The procedure is not
as easy as applying for the credit.
The first thought before applying for personal
loans is to plan a budget. But if you are investing in the credit for emergency
purpose, the financial planning goes for a toss. Many overlook this aspect and
end up paying higher interest rates. This directly strains your hard-earned
money. Therefore, it is imperative to manage the loan EMIs smartly.
Following tips should help you with the
same:
Increase EMI frequency: If your lender is comfortable, you can submit a request letter to
increase the frequency of your EMIs. For example, if you are paying your EMI
once a month, try to increase the frequency to twice a month. This increase in
repayment can significantly reduce your overall loan duration and help repay
your credit faster.
Decrease EMIs: When you apply
personal loan online, one tool that is at our perusal is the EMI
calculator. One can use it to check the monthly instalments they need to pay
towards the loan. They also get to know how much of their amount would go
towards the interest rates and principal amount. You can input as many loan
schemes and decide which one fits your budget. However, you may face some
financial crunch and find the ongoing EMI too high. In such scenarios, you can
ask the lender to decrease the decided EMI amount. This significantly increases
the total loan term.
Generate additional income: You can find other means of income to pay off your debts. Maybe you
could receive incentives or increment or bonus which you can divert towards
your loan repayment. This way, the total duration of the loan reduces. It also
appeases the financial pressure on the borrower. In case you are aware of such
increments and incentives beforehand, you can inform the lender of the same.
Prepayment option: When you avail a loan, the interest rates are not the only charges
applicable on the total sum. There are other charges which also play a vital
role such as prepayment fees, foreclosure charges, maintenance costs, documentation
fees, and so forth. Prepayment on floating interest rates is not a concern. But
prepayment on fixed rates includes a penalty. This, nevertheless, reduces the
interest rates on your EMIs.
Part-payment: This is another useful repayment option. It works on similar lines
of prepayment. It is where you repay a significant amount which may not amount
up to outstanding principal value. Part-payment minimises your interest rates
as well. You can make more than one part-payment during the repayment phase.
