Taking a personal loan is incredibly easy. Especially with the advent of technology, you can get an easy personal loan upon a few simple clicks. But the real hard work lies in managing your personal loan EMI payments successfully. You have to be extra careful with these EMI payments. Defaulting on one payment can really affect your credit score. Hence, we give you the top 5 smart ways to manage the EMI payments on your personal loan without any worry. Some of the required smartness lies in your actions before applying a personal loan. So, read on.
1. Personal Loan EMI Calculator: This one is one of the greatest boons of the internet for people looking to apply for a loan. Always use a personal loan EMI calculator to check how much exactly you would need to pay for your EMI per month. If you are getting a high EMI amount and you think you can’t afford it, go for a lower loan amount. Always apply a personal loan for an amount whose EMIs can easily fit in your monthly budget.
2. Do your Planning: Do not take a personal loan on a whim. This is borrowed money which should only be spent on emergencies or important events. A personal loan EMI calculator will let you know the amount you need to set aside every month as EMI. Apart from this, leave out some cash every month for urgent requirements. For example, a medical emergency arises in your family. Now you have to pay the medical bills as well as your EMI. In such a case, missing either of the two can land you into trouble. So, it is always advised to plan your monthly expenses along with your EMI and emergencies before applying for a loan.
3. Keep Loan Repayment Your First Priority: Once your tenure for the personal loan has begun, your EMIs should take precedence over any other expenses. An EMI should be paid in a timely and disciplined manner. Every other expense must be adjusted according to the cash flow remaining after the EMI payment. Time and regularity are of crucial importance when managing your monthly EMI payments. Missing or delaying a single payment can lead your CIBIL score to plummet.
4. Pre-Pay the Loan: If during the tenure you come across some extra money, invest it in pre-paying your EMI. Pre-paying your EMI is one of the smartest ways of paying off your personal loan. It will reduce your tenure as well as the principal amount of the loan. This means that you will ultimately be saving a lot on the interest. It will greatly reduce the burden on your shoulders and your personal loan will be over sooner than you had planned. So, if at a time you have some cash lying around, don’t spend it on anything else other than repaying your loan.
5. Pick a Suitable Scheme: Many financial institutions offer different tenures and interest rates on the same loan amount. Choosing a short tenor for your loan will enable you to manage your finances efficiently. This means you’ll have to pay fewer EMIs and you will get freedom from the stress of repayment sooner. Avoid over-borrowing, and read the scheme documents carefully. Apply for a personal loan when you are convinced that you have the financial backing needed to pay the EMIs on a timely basis with some amount left over for any emergencies that may occur.
Following these tips to the fullest will keep you safe from defaulting your payments and lowering your credit score. Repaying a personal loan can be a breeze if you plan strategically for it.