A personal loan can be your saving grace in extreme financial need. Unlike other loans, a personal loan is a kind of credit that does not need collateral.
While getting a personal loan is a breeze for most individuals, keeping up with personal loan EMI payments can be challenging.
And, in the hustle and bustle of daily life, it might be easy to put off making a repayment plan for a 10 lakh personal loan. However, this is not a good method of managing money.
It’s important not to miss out on making your personal loan EMI repayments since doing so can seriously affect your finances and long-term financial plans.
Here are some suggestions for keeping up with your 10 lakh personal loan EMI instalments so that this doesn’t happen to you:
10 Powerful Tips to Manage Personal Loan EMI for 10 Lakh Personal Loan
Check Your Repayment Capability
Knowing how much you can afford to put toward your personal loan EMIs each month is the starting step toward timely loan repayment. Hence, ensure that you thoroughly understand the personal loan rate of interest and the repayment options the lending institution provides.
With this info in hand, you can calculate the total EMI throughout the life of the loan and make more informed financial decisions.
Since many financial institutions offer these products, personal loan EMI calculators are now widely available online. Online calculators allow borrowers to quickly determine their monthly repayment amounts for a personal loan. As a result, you’ll be able to make more educated choices about your loan repayment.
Borrowers can use these free tools to determine whether or not they will be able to afford the monthly instalment sum for the whole loan term.
Having a healthy emergency fund is crucial to your long-term financial security. These funds can be useful if you are in a position where you cannot pay your EMIs. Several liquid assets can be used to pay your EMIs, including gold, stocks, and term deposits.
In addition, having a savings fund has even another advantage. With these reserves in place, you won’t have to worry about missing a payment on your EMIs if you have an unexpected economic need. That’s because you already have enough saved to cover the EMIs in an emergency.
Set Personal Loan EMI Repayment Reminders
Having a regular reminder alert you when your personal loan EMI is due is a good way to avoid missing any repayments. By setting up these alerts, you can be sure that you’ll never forget to make your personal loan EMI payments.
On top of that, you can save up for your EMI in plenty of time, even if you don’t have enough money to cover it.
Budget Your Finances
You must never pay more than 50–60% of your monthly income in EMIs. This range should provide enough room to cover your other expenses without pressure. However, suppose your EMI payment exceeds 50-60% of your wage. In that case, it can cause serious financial hardship.
On top of that, you’ll have to sacrifice your demands and lead a miserable life. However, there’s no need to give up your current way of life. While you are obligated to return a loan, it is wise to shorten any wasteful or needless spending.
Keep a high CIBIL Score
A CIBIL score is useful in figuring out whether a potential borrower is creditworthy. It’s a summary of your credit history composed of three numbers. Good CIBIL scores often range from 700 and above.
A personal loan is easily available to customers with these CIBIL scores. Plus, if your CIBIL score is high enough, you can qualify for a low-interest personal loan.
Borrowers can rest easy knowing you’re trustworthy if your CIBIL score is high. Suppose the borrower has a strong payment history and a high CIBIL score. In that case, the lender can agree to the borrower’s demand to delay the EMI payment schedule or to lengthen the loan term.
Choose a Longer Loan Term
Your personal loan EMI will decrease as your loan term increases. The greater the loan, the greater the EMI will be.
You can avoid putting undue stress on your future finances by choosing a longer loan term when applying for a personal loan. As a result, you can lower your EMI amount and make your monthly payments more manageable.
Select a Balance Transfer Loan
A balance transfer loan lets you transfer your remaining loan amount to another lender. If you switch loan companies, you can get better terms, such as lower interest rates and longer loan payback periods. Both of these things work together to lower your EMI rapidly.
Opt for Top-Up Loans
You can better organize your EMI payments with the assistance of these loans, which facilitate acquiring extra cash from the loan provider. For example, you can lower your principal amount and EMIs with the help of top-up loans.
Moreover, making your EMI payments on time may reduce your interest rate, extend your loan term, and reduce monthly expenses.
Restructure Your Loan
Before signing any paperwork, you should finalize the appropriate loan amount and the repayment period. After signing, if you realize you won’t be able to afford your EMI sum, talk to your creditor about extending the loan’s terms.
One alternative is to get a personal loan to pay off all your debts. For example, suppose you consolidate your debts into a single EMI. In that case, you won’t have as many monthly payments to keep track of, and you won’t have to worry about paying off expensive loans.
Think About Prepaying Your Loan
Don’t feel obligated to pay the loan in full at the end of the term. Consider prepaying the loan or, even better, foreclosing if you come across any extra cash, such as via a gift or a raise at work.
See whether any penalties apply, then make a simple cost-benefit assessment of the fine vs. the interest paid over the life of the loan. Also, you can try talking to your lender about increasing your EMI payments. If you can pay off your debt sooner rather than later, you’ll save money on interest.
Making timely personal loan EMI payments is crucial. Your credit rating can take a serious hit if you miss the EMI payments. And if this happens, it will affect your credit score. In addition, you may also have to pay heavy penalties.
As such, it is in your best interest as a borrower to consider the recommendations above for effectively handling your personal loan EMIs.
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