A personal loan is one of the most prudent options when you are dealing with financial constraints. Nowadays, you are allowed to apply for a personal loan, and the process is extremely easy. The approval process has also become so fast that you can expect the funds in your account within a few days. But the struggle arises while repaying the personal loans.
With high personal loan EMIs, holes might appear in your finances once again. If you are unable to pay your EMIs on time, it will affect your credit history and reduce your chances of loan approval in future. Keep scrolling to understand a few tricks to reduce the EMI of your personal loans.
1. Find a Personal Loan with a Low-Interest Rate
The interest rate gets added to the amount you borrowed to determine your monthly EMIs. With high-interest rates, you will have to repay a lot more than what you actually borrowed. Therefore, low-interest rates should be on top of your checklist to get the best personal loan offer.
You need to ensure that the interest rate is mentioned in the papers before accepting the terms and conditions. If there’s any scope of negotiation with your lender, don’t ignore it. You can find the lowest interest rate personal loan at the Bank of Baroda.
2. Increase the Repayment Tenure
You are required to pay back your personal loan within a stipulated period. Always remember that the repayment duration is inversely proportional to the amount to be paid every month. Therefore, increasing your loan tenure can considerably lower your monthly EMIs.
But you should be aware that a longer repayment duration will also mean higher interest rates. Interest rates are calculated on the basis of every annum. A longer duration will indicate a higher overall interest amount.
3. Look for a Balance Transfer Facility
Are you currently struggling to repay the EMIs of your existing personal loan? Most people aren’t aware that they can change their lender in the middle of the loan tenure. If you find a lender offering lower interest rates than your current lender, you can always switch.
This process is called balance transfer, and it can easily reduce your current EMI rates. However, you should look for the charges associated with a personal loan balance transfer. Avoid it if the charges are too high, and you only have a few EMIs left.
4. Consolidate Your Loans
You might have been in a situation where you had to borrow from multiple lenders. It can be highly difficult to track the outstanding amounts from each lender and manage your finances to comfortably pay the EMIs on time. It also expands your chance of defaulting on EMI payments.
When you fail to repay your EMIs on time, your credit score will also be negatively impacted. In this situation, you can apply for a personal loan to consolidate all the existing loans. It will reduce the overall EMI you pay every month and aid proper debt management.
Summing up
Finding the lowest interest rate personal loan and increasing its tenure are some of the best methods to reduce your monthly EMIs. Moreover, remember to calculate your monthly EMIs before applying. Nowadays, you will find online personal loan EMI calculators to determine your monthly payments without the hassle of manual evaluation.
References:
https://www.fullertonindia.com/knowledge-center/how-to-reduce-personal-loan-emi-burden.aspx
https://www.gopaysense.com/blog/ways-to-reduce-the-emi-on-your-personal-loan/
