Here’s how you can save on EMI on your personal loans in 2019
In today’s time, personal loans are easily available in the market, but they usually have a higher rate of interest and EMIs. Repaying a loan can be an arduous task, especially when you have chosen a l long repayment tenure. In such a case, it is imperative to plan your expenses in an efficient way. If you do not work out your finances carefully, the EMI’s which you pay towards your loans can drastically impact your monthly budget. EMI’s can take out a big chunk of your monthly income landing you in financial turmoil.
Here are a few steps which you can take to taper down your EMI’s and live a stress-free life:
1. Pre-pay your loan
You can periodically prepay your loan to lower your long-term interest costs and get out of debt early. If you have liquidity, you can use that amount to repay your loan balance, which might even be paying a nominal foreclosure charge. When you prepay even a negligible amount of personal loan, it can save you interest amount on the borrowed loan, which otherwise would have been applicable throughout the loan tenure. You can also consider pre-paying loan amount when the interest rates are falling. This would help you repay a portion of your loan at a lower interest rate, you can save a good amount of money, rather than prepaying loan when the interest rates are higher. Through this method, you can pay off the borrowed loan amount faster, and soon you can be debt-free.Read more on Digital signature
2. Increase the monthly EMI
When it comes to EMI repayment, every lender has a set of rules and regulations. Many lenders allow the borrower to amend the EMI payout each year. Hence, you should make the most out of this benefit and revise the EMI every year as per your annual budget. For example, if there is an increment in your income or you have developed another source of income, you can ask the lender to increase your EMI amount to repay the loan faster. This method will be beneficial for you in the long run, it can reduce your loan tenure significantly, and you can pay off the debt in a short period of time.
3. Read the Terms and Conditions Carefully
At times, loan lenders charge hidden fees from their customers. These hidden charges can be in the form of the processing fee, late payment charges, foreclosure charges, and many other extra costs. The loan agreement contains all the important policies and charges related to the loan. Hence, you should have an eye for detail whenever you go through the terms and conditions of the loan agreement. This practice will ensure that you do not end up paying any unexpected charges that may increase your EMI, thereby increasing your overall loan amount.
4. Estimate the EMI with Personal Loan EMI Calculator
With the personal loan EMI Calculator, you can get complete clarity of the EMI that you will pay with respect to the loan amount and tenure. With the help of this calculation, you can plan your financial schedule and properly do the budget allocation
The above strategies will help you make smarter decisions when applying for a personal loan. By smartly planning your move, taking well-informed and astute financial decisions, you shall be successful in reducing your EMI and get rid of the burden early. By lowering your monthly EMI and paying them on time, you can also maintain a decent credit score which will, in turn, boost your financial profile.