20 AUGUST, 2019

Personal loans have become important than ever. You can get a loan to either meet your short-term or long-term financial needs. Personal loans help you to keep away from bankruptcy. Recent trends have shown that millennials also prefer meeting lavish goals such as traveling, destination weddings, etc. with the aid of personal loans. Once you have secured a loan, you tend to care less about repaying the personal loan and also tend to overspend more than originally planned. So in order to avoid defaulting, here are a few useful tips to help you manage your personal loan EMI payments efficiently.

  • Before you apply for a personal loan, always use a personal loan EMI calculator to check how much exactly you would need to pay for your EMI per month. If you think that affording a higher value per month might get strenuous for you, do not go for a high personal loan amount. Apply for a personal loan that you can repay easily.
  • Also, pick a personal loan that would amply satisfy your needs and not an outlandish amount.
  • Keeping a high CIBIL score will help you get a personal loan with lower interest rates, which subsequently means lesser EMIs. Therefore always try to maintain a good credit score and not miss any EMI payment.
  • It is always important to plan for unexpected financial emergencies and set aside an amount for such urgent scenarios. Let us consider a time when one of your family members gets admitted to the hospital, and you have to now pay their medical bills as well as your EMIs. Now if you have a certain amount set aside for EMIs, then you will come through the situation all right, but if you haven’t, you will miss your payment and your credit score will plummet.
  • Make sure you pay your EMI on time. It is very important to have a personal loan repayment strategy to be regular with your loan payments and avoid being a defaulter. In case there’s a delay in your payment, it will lead to extra charges and payments. And if you miss it altogether, there will be higher penalties and severe consequences for your credit score. So, be mindful of the EMI deadlines and try to pay in advance.
  • Before applying for a personal loan, check whether the amount for the EMIs is more than 50% of your monthly income. If it is, don’t go for it. You should have enough left after paying the EMI so that you could afford the basic necessities for the month.

Once you have identified your financial requirements, it is time to apply for a personal loan. Some banks offer lowest interest rates, flexible repayment schemes, and convenient EMI plans on personal loans. Get access to an online personal loan EMI calculator, and get a fairer idea about your EMI figures, to never miss a payment during the repayment tenure.

Read More: 4 ways of being regular with personal loan repayments

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Disclaimer: This Article is for information purposes only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. The Bank makes no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Article. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from the Bank. The Bank, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein. Tax laws are subject to amendment from time to time. The above information is for general understanding and reference. This is not legal advice or tax advice, and users are advised to consult their tax advisors before making any decision or taking any action.