Tips to Reduce Your Personal Loan EMIs This Year | Kotak Mahindra Bank - Personal Loan Stories

20 JUNE, 2022

A personal loan can be a great help when you are short of funds. You can avail it easily with a few online steps and get the amount disbursed within hours once you fulfil the formalities.

Moreover, you need not submit any collateral to avail the loan and its interest rates are much lower than credit cards. The best thing about a personal loan is you need not repay the entire loan amount immediately. You can repay the loan amount in flexible payment schedules by choosing a tenure that suits your financial viability.

 

However, even with such convenience, you can find paying EMI stressful. Paying a high EMI every month can derail your budget and impact your goals. Worry not, as here are some expert-backed tips that you can use to reduce your personal loan EMI this year. Read on.

 

  • Opt for a longer tenure

You must not borrow more than you need. While you might be eligible for a higher loan amount, it will unnecessarily increase your loan amount and EMI. Moreover, while determining your tenure, go for a longer one. A longer tenure means smaller EMIs. The loan amount is divided into longer duration, which reduces your EMI amount. However, you must keep in mind that it will increase your interest payout and total cost of borrowing.

 

  • Choose a lender carefully

It is crucial to choose a lender carefully. A lender offering a lower interest rate can help you reduce your EMI. Research different lenders and opt for one offering the best deals. It would be best to contact your existing lender as they are aware of your financial condition and might give you affordable interest rates. Moreover, you must negotiate with the existing lender to lower the interest rate and get a reduced EMI. Also, you must know that you can transfer your personal loan from one lender to another to reduce your EMI.

 

  • Know about the loan beforehand

You must know about the loan you are availing and ensure that you are aware of its terms and conditions. Often, there are hidden charges in the loan agreement that you might not be aware of until you start repaying the amount. Read the fine print carefully before you sign on the dotted line. Moreover, ensure to check your EMI before you avail the loan. A personal loan EMI calculator can help you do so. It can also help you decide the tenure so that you have affordable EMIs. 

 

  • Consolidate and prepay

If you have more than one debt, your EMI can go significantly higher. Consolidating your debt could be a better option. You can consolidate all your debts into one loan and pay only one EMI timely. This will help you avoid defaulting on EMIs. Moreover, if you can afford it, you can make a part payment or full repayment of the loan to reduce your EMI and borrowing.

The aforementioned tips can help you reduce your personal loan EMI and the cost of borrowing. However, ensure to use a personal loan eligibility calculator to know your eligibility to avoid getting your application rejected. 

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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. 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 Kotak. Kotak, 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.