Tips on devising a repayment strategy for a personal loan

65

You have finally decided to take financial help for your immediate expenses. You are prepared and are just about to apply for a personal loan. Now take a step back and think about a repayment strategy. Have you planned your way to fully pay-off the loan? If not, do not worry, as we have you covered.

These loans help fulfil various needs like expensive purchases, vacations, medical emergencies, etc. Having a financial plan in place to repay them saves you from the hassle later on. It also helps you relax throughout the loan tenure. Your credit score also gets affected by this, so you need to analyse these before you apply for personal loan. Here are some of the ways to repay them effectively:

Choose tenure wisely: It is crucial to consider the loan tenure you opt for. It affects the equated monthly instalments you pay onloan. The monthly repayments could be higher or lower based on the loan term. It is best to plan out and observe your expenses and income before applying. Upon deciding on the instalments, you can use a personal loan EMI calculator to know the borrowable amount and tenure.

Maintain discipline: You get an instant personal loan with the seamless application procedure. Hence, it is essential to show the same swiftness and discipline while repaying it. You do this by keeping your expenses in check. If you face difficulty tracking your EMIs, you can automate it by contacting your bank or issuing post-dated cheques to the lender.

Budgeting: It is vital to track your expenditure after you get the loan. It is best to prioritise the loan as a financial obligation. You do this by using the loan for its intended purpose only and monitoring your expenses. Make sure to not indulge in compulsive buying and limit your spending on luxuries. For successful repayment, you would have to make some lifestyle changes.

New income sources: It is useful to have a backup plan when you take personal loans. Sometimes, your existing income and savings may fall short for loan repayment. In that case, having additional income sources to aid you becomes crucial. Hence, find ways to earn from different sources during the tenure. Try to pre-pay the loan as and when you can to reduce the burden.

Debt consolidation: If it is difficult to pay your EMIs, you can opt for debt consolidation. It clubs your loan with your other credits. Thus, helping you manage and simplify all your debts in one place. As a result, you pay a single fixed interest for all your loans. The personal loan interest rate reduces, and you need not pay varying rates.

You manage your EMIs better when you apply for personal loans online. You get to monitor your loan status. This helps you plan and manage finances accordingly.

Stay Connect with us & Write for us finance! If you have more finance Related blogs!