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08 APRIL, 2022
Personal loans can help you resolve your varied money woes. You can apply for the loan online and get a quicker approval to meet your financial needs. Moreover, you can repay through a flexible repayment option. Lenders allow you to choose your tenure as per your financial comfort to help you get an affordable Equated Monthly Installment (EMI). It won't be wrong to say that a personal loan is a win-win deal. However, along with knowing how to avail a personal loan, you must know how to manage it too. You must have enough funds to pay for all the other expenses after paying the EMIs.
Helpful tips to manage your personal loan
Before you avail a personal loan, you must be well aware of your obligations. You must strive to get a personal loan at the best interest rates. While applying, check your credit score and ensure that it is above 700. Lenders usually charge higher interest rates for low credit scores. Also, the loan you avail should be affordable for you. Review your income, expenses and upcoming future expenditure while deciding the loan amount. It would be best to use a personal loan calculator to calculate your EMI. Checking your EMI will help you avail an amount that you can comfortably repay in the due tenure. Moreover, you must also check the prepayment and part payment clauses so that you can close the loan hassle-free whenever you want.
Choosing the right tenure can significantly help you manage your loan better. The tenure determines the EMI value and can affect your budget. If you take a shorter tenure, you will get higher EMIs and the loan will be paid faster. However, you could face challenges managing other costs with a high EMI. On the other hand, a longer tenure means lower EMIs and more time to repay the loan. But you must also know that you pay more interest in longer tenure. Assess your finances and choose the tenure carefully.
While checking your affordability and choosing a tenure, ensure that your EMI should not be more than 30-40 percent of your monthly income. A higher percentage of EMI obligations can affect your monthly budget. After paying the EMI, you must have enough income to pay for other monthly expenses. It would be best to reduce your splurging and luxury spending after you avail a personal loan to avoid defaults. Moreover, never miss out on EMI payments. You would have to pay a high late fee and penalty if you skip your EMIs. It could hamper your credit score too. You can automate your EMI payments to avoid missing them.
A personal loan could play a significant role in helping you meet your financial needs if managed well. However, it can affect your finances adversely if you are not able to pay it on time or borrow more than your affordability. Therefore, avail a personal loan only when you have considered your repayment capacity.
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