How to reduce Personal Loan EMIs?

Speed and convenience govern and drive most aspects of our lives today. In this fast-paced world, we need everything instantly; be it groceries or loans. Instant loans are the digitized version of the regular loans that take only a few minutes to get approved. However, the convenience of such loans may tempt us to overspend on frivolous purchases or borrow more than we require.

If managed smartly and responsibly, applying for a Personal Loan could address short-term financial needs without compromising an asset. You can check your Personal Loan eligibility easily on an online Personal Loan Eligibility Calculator. The entire instant loan process is seamless and hassle-free and such Personal Loans are best suited for time-pressed borrowers. A good credit score is a foremost requirement for the approval of your Personal Loan application.

Smart Ways to Reduce Personal Loan EMIs

• Get the right loan amount: The applicable EMI on a Personal Loan is directly proportional to the amount you borrow. You should be careful about not borrowing more than your requirement.
• Calculate your EMIs Beforehand: A Personal Loan EMI Calculator gives you the estimated EMI that you will have to repay every month. Budgeting for your EMI every month is a smart way to adjust and manage your finances accordingly. The option of an instant online Personal Loan may entice you to borrow a bigger amount and that could shoot up your EMIs.
• Choose the right loan tenure: Longer the tenure of your loan, the lesser will be your Personal Loan EMI. However, with longer repayment tenure, you pay more in terms of interest. So, if you are comfortable with paying a bigger amount as PL EMI, choose shorter loan tenure and vice versa.
• Balance Transfer Facility: If you are servicing a high interest rate Personal Loan, you could approach a new lender that offers a low interest Personal Loan. Balance Transfers usually come with promotional and discounted interest rates to attract new customers. Even though the loan amount remains the same when you switch lenders, your Personal Loan EMIs would come down with a lower interest rate on the new loan.

• Debt Consolidation: It is a financial strategy to combine all your existing loans into a single loan. You could consider combining all your existing Personal Loans into one Personal Loan. Even if the new Personal loan has a high rate of interest, paying a single EMI would be comparatively cheaper and easier than repaying multiple loan EMIs, interest, additional charges, penalties, etc. However, before you apply, do check your Personal Loan eligibility to ensure the approved loan amount covers the combined outstanding amount of the previous loans. Try to negotiate with the lender for a lower interest rate on the Personal Loan.

  Suggested Read: How to consolidate debt with a Personal Loan?

• Negotiate with your Lender for a Lower Interest Rate: If you are longtime customer, you could approach your existing lender to restructure your loan with a lower interest rate. The interest rate of a Personal Loan is the biggest determinant of a PL EMI. This could make a huge difference in your EMIs. Do your research to find out the lowest Personal Loan interest rate available.
• Borrow Money from Friends and Family: Personal Loans usually are taken to fulfill immediate financial needs. Rather than borrowing a large Personal Loan amount from a lender at a high rate of interest, you could borrow from friends or family to cover a portion of your purchase. This way, the amount you need to borrow from a lender reduces and hence the applicable Personal Loan EMI also comes down. If you already have a Personal Loan, you could use the money from friends/family to pre-pay a portion of the outstanding loan amount and get your EMIs reduced.
• Leverage your Assets: Mortgage loans are low interest secured loans. You could consider pledging a property or some gold jewellery to get a loan and use it to pre-pay your Personal Loan. Your outstanding loan amount gets reduced and so does your Personal Loan EMI.
• Opt For Automatic Online Payments: One of the main reasons for falling into an EMI default debt trap is the cumbersome process of keeping track of billing cycles and manually making EMI payments. And if you fail to clear the bill on time, the outstanding balance starts accruing huge interest. The best way to repay your instant Personal Loan EMIs on time and not be in debt is to set up automatic online payments.