Personal Loans are unsecured loans that a bank provides to their customers to meet their short-term requirements and is given to both salaried and self-employed individuals. Banks do not ask for any collateral for personal loans, so the interest rates for it is high compared to other loans. Personal loans can be used for a variety of purposes like house renovation, medical expenses, planning a vacation, etc. With personal loans available easily these days, you need not break your hard-earned savings to meet these kinds of expenses. Also, they can be conveniently repaid in monthly installments.
Personal Loans are provided based on the applicant’s credit score, his monthly income, and his repaying ability. Documentation for personal loan is simple.
The loan issuing company would require the customer’s ID proof; address proof, salary certificate, bank statements, and latest ITR. The loan sanctioning process and verification procedure is faster compared to other loans and usually, the funds get credited to your account, in a much shorter time with less paperwork.
Taking a personal loan is not cumbersome anymore. You do not have to walk to banks anymore; you can apply for a personal loan right in the comfort of your home. You can use a loan aggregator site like Fincover to compare loans from multiple lenders and apply. The entire process is digital and paperless and you will receive the amount within a short time once your loan. Personal loans are generally available at a shorter tenure compared to other loans. A Personal loan is a boon to salaried and non-salaried employees. However, when it is not managed properly, it can become a bane. Understanding how to repay your loan efficiently would not only save you valuable time but also help you save your hard-earned money.
Tips for effortless repayment
Getting a personal loan is not so difficult these days with so many options available. The challenging part, however, is repayment of the loan on time. If you fail to make the payment on time, it will affect your credit score and affect your future loan prospects. Here are the top tips for repayment of personal loans. These seven effective strategies can help you manage your personal loan efficiently and achieve your financial goals.
- Always keep a couple of EMIs as an emergency corpus. At times, there might be some sudden expenses popping out of nowhere. In such cases, you may not be able to make timely payments. Missing out on EMI payments may affect your credit score adversely
- Prioritize your loan repayment and put the other expenses later. Be disciplined and diligent while paying your EMIs
- Cut down on unnecessary expenditures. Put a budget and list out expenses that you make. Listing would allow you to make note of unnecessary expenses so that you can avoid finance shortage for your EMIs
- Try increasing your EMI gradually. Say, for example, if you receive a bonus from the office, you can use it to pay off your loan. Adding to your monthly EMI would allow you to finish your loan in a much quicker time. Certain lenders charge a prepayment charge if you want to finish the loan quickly. Check with the lender that you have chosen about preclosure charges
- Keep a reminder of your monthly EMI so that you do not miss them out. You can set up an automatic payment (ECS) of the EMI amount to avoid the problem
- Debt consolidation can be helpful if you are handling multiple debts. You can add all your debts, and combine them into one, thereby simplifying your repayment process at a reduced interest rate.
Whether you are looking to pay off your debt or save money to improve your credit score, these tips would help you easily. In conclusion, managing personal loan require careful planning and clear handling. Mishandling personal loans can be disastrous for your credit score and may affect your prospect of getting a loan. Always read the terms and conditions of the loan and seek professional advice if you need a tip. Stay on top of your personal loan repayments and achieve your financial goals easily.