Congratulations! You have had your personal loan application approved recently.
You might have chalked out a plan to repay the loan.
Believe it or not, if you don’t pay your EMIs on time, you may end up with facing costs in terms of interest and late repayment penalties.
Therefore, repayment of the loan should be your top priority.
You might be sure of having the financial means to pay the loan back in time. Better, plan for the efficient management of the monthly EMIs even before the loan is approved.
Here are 6 actionable ways you can use to manage your personal loan EMI efficiently:
Live Within Your Means:
This is your first rule of success. Before applying for loans, make sure you can afford to repay the loan amount and the associated charges. It’s advisable to make a plan for smooth repayments so that you can settle the loan without affecting your way of life.
Set the EMI Amount
Work out your financials before stepping to avail a loan. Set out strategies and plan your monthly expense. Choose the monthly EMIs you’re comfortable with. Be sure the EMIs won’t be putting a hole into your budget. It shouldn’t interfere with your monthly savings, nor disrupt your normal way of living and spending.
Crunch the Numbers
Look at all your monthly expenses and draw up a budget. Count every single item, ranging from groceries to transport to utility bills, to education fees and insurance premium if you have any.
Don’t miss annual expenses like renewing your medical plans, life insurance etc . Once you list out every item, work out how much of your disposable income you can spend on your monthly loan repayments.
Pay Attention to The Fine Print
Every word speaks. So, pay attention to all small words and long sentences you find in the terms and conditions of the loan agreement It makes sure you actually understand what’s being said. Don’t hesitate to ask if you don’t understand any point. Good loan providers explain complex terms in layman’s terms, so that you know exactly what you’re signing up for.
Be Honest to Avoid Penalties
Late payments of EMIs accrue late payment charges as well as affect your credit score. It also throws you off your personal loan repayment plan.
If you’re struggling to pay off for a month, meet the loan provider or the bank. Be honest and upfront about your situation. Explain your situation and ask if they can extend your due date. Your lender can surely help you on it . Banks or lenders do often have flexibility. They may restructure your loans or extend the due date.
Think about New Income Sources
If you put your best best efforts for staying top of things but still struggling to pay off your monthly balance, it means you need more income for the repayment of the personal loan. Think to generate more income. You can do this either by stepping into a side business or working part-time.
If you chalk out your repayment plan, managing your personal loan is not a hard nut to crack. Develop a good intention and maintain discipline. With these tips, you can manage your debts well.