5 key tips while making personal loan EMI payment

5 key tips while making personal loan EMI payment

5 Top Tips While Paying Personal Loan EMI


Summary: Don’t let personal loan EMI payments become a nightmare for you. With these five helpful tips, avoid common pitfalls and stay on top of your finances. Keep your credit score healthy and budget under control. Start taking control of your personal loan EMIs today! Read on for details.

Are you looking to take a personal loan to meet all your immediate financial needs? Personal loans can be a convenient option for quick money, be it for home renovation, education expenses, medical emergencies or anything else. Whereas, managing personal loan EMI payments once approved can sometimes be overwhelming.

While defaults or delays in your personal loan EMIs can have serious consequences, including a negative impact on your credit score, with a little effort and discipline you can repay your loan without any hassle. So, let’s dive in and explore these tips to help you stay on top of your personal loan EMI payments.

Borrowers also face common difficulties during personal loan EMI payments

Planning your loan EMIs can go a long way in avoiding potential financial losses. But only a few people are able to remain cautious of this.

Here are five common pitfalls that borrowers face while making personal EMI loan payments and how to avoid them –

· Missing payment

Many financial institutions usually charge a penalty of 1%-2% of the lapsed payment amount to encourage timely loan EMI payments and maintain payment discipline. Staying updated with your personal loan payment schedule and setting up automatic payments or reminders to ensure timely payments is essential to prevent such a scenario.

Ignoring interest rates

Whenever you take a personal loan, consider the interest rate and how it can affect your monthly loan EMI payments. If you ignore the interest rate, you may end up paying more than the amount borrowed. Therefore, it is very important to understand the interest rate and its impact on your loan repayment schedule.

· Ignoring prepayment options

Many borrowers remain unaware of the benefits of prepaying their loan EMIs. Prepayment options can reduce the total cost of the loan and shorten the repayment period. However, some borrowers overlook this option, increasing the loan cost in the long run. It is important to understand the prepayment options available and take advantage of them to reduce the total cost of your loan.

· late payment

Making late payments can increase the total cost of your loan and negatively impact your credit score. To avoid late payments, you should set automatic payments or reminders and ensure sufficient funds in your account to cover the loan EMI payments. For example, IDFC First Bank offers affordable late fee payments for its loan services, including a provision of up to 2% of unpaid EMI or up to Rs 300, whichever is higher.

· Opting for a longer tenure

Many borrowers continue to opt for longer tenures to reduce their monthly EMI payments. However, this may also result in higher interest charges and increase the total cost of the loan. It is important to consider the long-term pros and cons and choose the repayment schedule that best suits you.

Borrowing more than one can afford

Borrowing more than you can comfortably repay can lead to financial stress and even risk loan default. Before taking a loan, assess your financial situation, and borrow only as much as you can comfortably repay. This will go a long way in helping you avoid financial troubles, stay within your monthly budget and maintain a healthy credit score.

​Tips to manage your personal loan EMI payments effectively

It is very important to manage your loan EMI payments to maintain a healthy credit score and avoid late payment charges. Here are five useful tips to help you manage your loan EMI payments effectively –

· Understand the terms and conditions

Before applying for a personal loan, read the terms and conditions of the loan. This includes the interest rate, repayment period, processing fee, prepayment option and other charges associated with the loan. Make sure you know the terms and conditions of the loan and ask for clarification from your lender if necessary.

· Set up automatic payments

Missing a payment or making a late payment can have serious consequences on your credit score and may even result in penalties. To avoid this, set up automatic payments for your personal loan EMIs.This can reduce the chances of missing or late payment.

· Consider pre/partial payment options

Many debtors are un
Be aware of the pre/part payment options available for personal loans. Prepayment allows you to repay a part or the entire loan amount before the loan tenure ends. This can help you reduce the total interest charges and repay the loan faster. Whereas, it is important to understand the terms and conditions of prepayment. Some lenders may impose prepayment penalties or place restrictions on the frequency or amount of prepayment.

· Borrow and repay as much as you can afford

It may be important to assess your repayment capacity and borrow only as much as you can comfortably repay. Avoid borrowing more just because you qualify for a higher loan amount. Consider your monthly income, expenses and other financial commitments before deciding on the loan amount. Borrowing within your repayment capacity can help you avoid financial stress and ensure timely repayment of your personal loan EMIs.

· Compare fees and charges of different lenders

Personal loans come with various charges and fees, such as processing fees, prepayment charges, late payment charges, etc. It is very important to compare these fees and charges from different lenders before choosing a loan. For example, IDFC First Bank offers personal loans with affordable charges and fees, including up to 3.49% of the loan amount as processing fee.

conclusion

By creating a budget, setting up auto-payments, staying organized, considering prepayment options and asking for help, you can stay on track with your personal loan EMI payments and avoid late fees or penalties.

IDFC First Bank offers a range of personal loan EMI options with flexible repayment options to suit your requirements. IDFC First Bank’s hassle-free, digital application process allows you to apply for an instant personal loan within minutes. You can also choose from flexible repayment tenure up to 60 months and loan EMI payments at competitive interest rates. Apply Now and Get

Disclaimer
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