5 Tips to Help You Plan Your Personal Loan EMI Repayment like a Pro

When applying for a personal loan, the best strategy is to plan and think about the repayment of your personal loan EMIs. This can help you avoid late payment charges and any adverse effect on your credit score. So, plan in advance to find the best repayment strategy before you apply for a personal loan to avoid unnecessary costs and increment of your debt. 

Here are some important tips to help you repay your personal loan EMIs with ease – 

  1. Know Your Financial Capability

Checking your loan repayment capability is the first step towards planning for a personal loan. Analyze this against the rate of interest and the personal loan repayment flexibility offered by the loan provider. Many loan providers offer a personal loan repayment calculator. You can use this calculator to check the amount of the EMI you will have to pay if you take a personal loan. This knowledge helps make an informed financial decision.

  1. Have a Dedicated Account for EMI Repayment

Use your savings to repay the EMIs for your personal loan. Having a cash reserve before you apply for a personal loan is helpful at the time of personal loan repayment. Use your savings to create a non-cumulative FD account to get monthly payouts which can help pay your EMIs. Otherwise, having a simple savings account dedicated for this purpose is also helpful.

  1. Tracking EMI Deadlines

Keep an eye on your EMI deadlines. If you miss an EMI deadline even once, you could face EMI bounce charges and penal interest. These terms and conditions are clearly stated in the loan agreement and informed to you by the lender beforehand. Missing a single EMI repayment can not only bring additional expenses but also affect your credit score adversely. Set reminders for the EMI deadlines and make sure to pay them on time every month.

  1. Choose the Right Tenor for You

Consider factors such as your monthly income, monthly expenditure, and affordability before deciding on the tenor for your personal loan repayment. It is best to use a personal loan repayment calculator to arrive at the most suitable tenor according to the EMI amount that you can repay comfortably.

  1. Find Ways to Add to Your Monthly Income

A personal loan EMI repayment is an added expense to your list of monthly expenditures. It is always a good idea to find new ways to generate some additional income every month. This will ease the burden of EMI repayment and expenses on your salary. This can be done with the help of a side business or part-time work.

  1. Keep a Track of Your Expenses

Repayment of personal loan calls for a commitment from the borrower. You may need to make lifestyle changes and ensure that you are never low on cash at the time of EMI payments. Monitor your expenses with the help of an excel sheet or expenditure tracking apps to avoid overspending.

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