Tips for Managing your Personal Loan EMI Payments

Posted on Wednesday, May 3rd, 2023 | By IndusInd Bank

Managing your personal loan EMIs is not always as easy as it sounds. However, you may manage your personal loan EMI payments with ease keeping certain tips in mind. These include researching for the right lender, assessing your repayment ability, drawing up a budget, setting payment reminders, and exploring the possibility of prepaying your loan.

A personal loan is arguably the most dependable option when a financial emergency strikes. A collateral-free loan requiring minimal documentation, a personal loan can be used for a variety of personal uses including for paying medical bills, renovating your home, or going on a vacation among others.

Like any other loan, a personal loan can be repaid via easy Equated Monthly Installments (EMIs) over a tenure of the borrower’s choice. However, while applying for and obtaining a personal loan is usually a breeze, repaying the loan requires a measure of financial discipline and planning. Even a single default can, after all, damage your credit score, impacting your ability to obtain credit in future.

Read on to discover 5 great tips for managing your personal loan EMI payments in the best way possible.

Shop around before Selecting a Lender

Do not rush in to grab the first personal loan offer you come across. Do your research and carefully compare different lenders and their rates of interest, and loan terms & conditions – eligibility criteria, repayment tenure, and processing fees – before arriving at a decision. Make sure to look for a lower rate of interest and loan terms that suit your needs and preferences.

Assess your Ability to Repay

It is important to consider your monthly income and expenses when you take out a loan. There should be adequate surplus every month to comfortably pay off your EMIs after your basic expenses have been taken care of. IndusInd Bank offers potential borrowers the use of an online personal loan EMI calculator. This free and simple tool helps you get an instant estimate of the EMI amount you would have to pay against your personal loan.

You could enter different tenures and amounts multiple times to arrive at a suitable EMI figure. However, if you have a low income, it is better to opt for a longer tenure.

Draw up a Monthly Budget

It must be borne in mind that your EMI amount should not exceed 40-50% of your monthly income. Anything more than this could put a strain on your monthly budget. You could avoid financial discomfort by drawing up a list of your essential and non-essential expenses to figure out areas to cut back on. You could also make specific lifestyle changes to be able to comfortably accommodate your EMIs, embracing financial discipline that will stand you in good stead in the future.

Set Up a Monthly Reminder

Set up a monthly reminder before the EMI due date to avoid defaulting on payments. This will help you remember to keep your account sufficiently funded before the due date of deduction. The reminder should be set at least 5 days before the due date to make sure you have adequate time to gather funds just in case your account balance is insufficient for paying the EMI amount.

Look for Opportunities to Prepay your Loan

It makes sense to consider prepaying your loan if you receive money from sources such as gifts, or are awarded a salary increment at your workplace. Even a part prepayment can considerably bring down your debt burden, making it easier to manage your remaining EMIs. However, before you decide to prepay, it is important to do a quick cost-benefit analysis of any penalty you may incur and potential savings on interest over the loan tenure.

Obtain a Personal Loan from IndusInd Bank

A personal loan from IndusInd Bank comes with a number of features and benefits. Beginning with a paperless and instant application process – involving just 4 online steps – to speedy disbursal of funds – to low interest rates, an IndusInd Bank personal loan is marked by multiple benefits over other lenders . Moreover, flexible repayment tenures ranging from 1-4 years ensure that borrowers can easily and comfortably repay the personal loanin accordance with their convenience. Apply Todaywith IndusInd Bank!

Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information.