posted on 2020-05-21 06:23:38 by Admin
Personal Loan is a great financial product to meet your immediate financial goals. Many financial institutions offer customized personal loans as per your need. Even nowadays, a loan gets disbursed within 24 hours. As the process of getting a loan is getting easier, it is essential that as a responsible borrower youplan personal loan EMI repayment smartly. The planning takes place in two phases i.e. before getting the loan and after the loan gets cleared. So, it needs a proper analysis of the EMI that you will have to pay and a second timely payment of EMI. Along with that, check out other things that need to be kept in mind during the Personal Loan EMI Repayment plan.
The plan for EMI repayment takes place in two phases. During the pre-loan phase, you must calculate EMIs and check if you will be able to pay it with your regular source of income. Post getting the loan, prepare the proper schedule, and back -up funds to repay the EMI. The benefits are timely payments, good credit score, and increased creditworthiness.
1. Calculate Your Monthly EMIs
Before applying for the loan, you must check the monthly or yearly interest rate, repayment tenure, and loan eligibility. You can even apply for a personal loan online and can compare the interest rates of various lenders. Once you have the data of the interest rate and EMIs that you have to pay, map it to your monthly income. Make a rough monthly expenditure budget, then check if you can pay the monthly EMIs. Apply for a loan that does not lead to a financial burden to you. Do not confirm a loan in hurry, proper analysis in the key to finance your loan.
2. Choosing the Right Financial Institution
Not only interest charges, but there are also other charges which financial institutes apply which can disbalance your budget. In the market, there are various lenders which offer personal loans at low-interest rates but other charges as well. Like processing charges, EMI bounce charges, annual fees or maintenance fees, etc. So study in detail about various schemes. Some costs are added in the bill during the final phase of availing a loan. So be aware and check all the costs before finalizing the loan.
3. Track the EMI deadlines
Once you take the loan, your lender will inform you the dates for the monthly EMIs. So, add reminders in your calendar to pay the EMI. This is important as any missed EMI can lead to bounce charges and an impact on the credit score. Sync your Google Calendars for the payment. Most of the time, EMI will deduct from your account automatically. So, don't forget to replenish your loan account with the required funds.
Check Out: COVID-19 Personal Loan
4. Make Separate account for EMI repayments
You can set up a separate savings account or fixed deposit account for the EMI repayment purpose. Initially, you can add some spare funds in this account, so that you do not feel a burden in the initial months. Every month you can send funds to this account so that this money does not get used for other purposes. Thus, you will have a fully dedicated account for this purpose only.
5. Moratorium Option
Sometimes banks offer a moratorium option when there is a liquidity crunch in the economy. This option gives a borrower relaxation from paying EMIs for a certain time. The advantage is no impact on credit score or penal charges. Although these EMIs get added in the outstanding loan, which will either increase the EMI or the repayment tenure.
It is ideal to pay the monthly EMIs as mentioned in your contract. You must not miss them to avoid any strict action from the financial institution.
High Credit Score
Monthly EMI repayment helps to maintain or increase your credit score. This score measures your creditworthiness. The moment you miss the EMI, it will deduct points from the credit report. If you have a high credit score then it helps you get a loan at a low-interest rate. With a high credit score, you can get a high loan from the lender with quick disbursal. Even, your bank may allow a high credit limit on your credit card. Thus try to keep the credit score above 750.
Read Personal Loan vs Line of Credit. Which is Better?
Relaxation from Banks
If you always pay the EMI on time, then you have the trust of your bank. So, in case you miss an EMI due to some unforeseen circumstances. Then, contact your bank immediately, tell them the actual reason and your action plan to tackle the situation. The bank may ask you for a guarantor to pay on your behalf.
The importance of credit score is unsaid. It is a report of your credit history and will always be looked at whenever you need credits. So, in case you are struggling with a low credit score, then here are some tested ways to increase your score by 150 points.
To apply and for personal loans, home loans, business loans, credit cards, visit Loanadda.com. Best assistance and guidance is just one call away.
Download Now