Personal Loans are one of the easiest and most convenient financial instruments available in the market when you are facing a financial crunch. These loans can help you navigate through a financial crisis as they come with no end-use restrictions. You can use an instant Personal Loan for covering a wide range of expenses and even consolidating high-interest debt.
When you get an instant Personal Loan Online, it becomes extremely important to manage the monthly payments. In case you miss out on a payment, it hits your bureau score and brings it down considerably. To avoid this, you need to be well-prepared with your budget. Here are some tips to manage your Personal Loan EMIs in a better way.
- Evaluate your repayment capacity: As Personal Loans are unsecured loans; they might come with a higher interest rate. This might shake up your monthly budget as it will increase the number of your EMIs. You should only borrow the amount that you will be able to pay off without messing up your monthly budget and compromising your average expenditure. You can use an EMI calculator before applying to determine your EMIs against your Personal Loan interest rate, loan amount, and tenure. This process will give you an idea of how much you will end up spending each month.
- Plan your budget and expenses: Having multiple ongoing loans and credit instruments can mess up your monthly budget. It is important to calculate your monthly payments, evaluate the EMIs that you must pay and calculate the sum of your total basic expenses. The sum of your total EMIs should not be more than 50% of your monthly income. If your EMI costs are higher than 50% of your total income, you won’t be able to take care of necessities and emergency expenses. It is always better to stay on the safer side and not let your EMI payments exceed 50% of your total income.
- Maintain a good credit score: If you have a healthy credit score, it will be easier for you to avail of instant Personal Loans at lower interest rates. Your Personal Loan interest rate relies greatly on your credit score. The higher the credit score the lower your rate of interest will be. Similarly, if you have a poor credit score, lenders might hesitate in approving your loan request. Even if they approve, they might offer you a higher rate of interest. In addition to this, having a high credit score will help you gain approval for your Personal Loan faster.
- Don’t miss your EMIs: Timely payment of your monthly EMIs is crucial as missing out on these payments impacts your bureau score. If you are making your EMI payments through a cheque, make sure that you deposit your cheque on time. You can put the payment date on your monthly planner, set a reminder on your phone, or set alerts to notify you when the payment date is approaching. In case of automatic deduction, make sure that your account has enough balance at the end of the month so that the payment goes through seamlessly.
- Opt for a longer repayment tenure: If you choose a longer repayment tenure, your EMI amount will be lesser and easy to manage. Choosing a longer tenure will also help you pay off your loan with ease as you won’t have to rush through the loan tenure and struggle with your EMIs. A longer tenure will reduce your EMI amount and will make repayment easier.
- Use an EMI calculator: Before applying for the loan, make sure you use an online EMI calculator to determine your monthly payments. These tools are easy to use and are available on most lenders’ official websites. All you have to do is enter your loan amount, the interest rate offered to you, and your loan tenure. The tool will give out an automated and calculated amount, which is your monthly EMI. This way you can plan your payments and daily expenses in a better way.
Summing up
Getting an instant Personal Loan can help you wade through a financial crisis effectively. By considering the aforementioned tips, you can manage your monthly payments in a better way, without stressing your finances.
