Every day, necessities are increasing, forcing people to spend more on a day to day living. In addition to our daily expenses, there are certain significant investments or expenses which one should make to secure their financial future or even bring some relief in their life. For instance, individuals plan to buy a house or a vehicle to make their lives easier. For such vital expenditures, it is always advisable to take a loan rather than purchase with the help of personal savings.
A loan can be taken to fulfill any life objective or to funs an instant need. But one must keep in mind that a loan is also an additional expense, considering the interest which financial institutions impose on the EMI payable. A higher rate of interest can make repaying your home loan expensive. With a higher interest rate, the amount of EMI you have to pay goes up automatically. You can take the help of a personal loan EMI calculator to know about the interest rate.
There are quite a few tips or ways that can help you save money on your loan EMI. From negotiating with your lending company to changing your lender, mentioned below are some of how you can reduce the EMI of your loan.
Your loan agreement enables you to decrease the EMI of your present personal loan. Here is how you can do so:
3 Ways to Reduce EMI Of Your Existing Personal Loan:
- The amount paid beforehand while purchasing is known as a down payment. As the customer bears a portion of the cost of the item, the amount that the customer should borrow as a personal loan will be decreased as well. The principal amount borrowed by the customer is used to calculate the interest of the personal loan. Due to this, the greater the instant online personal loan application and amount, the more interest you will have to pay and the higher your EMI will be. Thus, putting down a substantial sum as a down payment is a careful move. It decreases the EMI and helps save money in the long term.
- The term of loan repayment is inversely comparative to the amount of EMI for a specific loan amount. The total due amount is circulated over a more extended period when you choose a longer loan tenure. This, in turn, decreases the payable amount as installments every month. But, selecting for a longer-term also means that you will be charged an interest rate on the outstanding debt for an extensive duration. While enhancing the loan tenure can reduce your EMI, it can transform into a more significant interest throughout the loan tenure. Thus, you must be very cautious before increasing your loan tenure and consider all the advantages and disadvantages before extending the loan duration. Also, check the personal loan EMI calculator to get the EMI amount.
- When it comes to EMI repayment of the loan amount, each lender has its set of laws. Several lenders permit the borrower to amend the EMI payout every year. Take benefit of this policy and renew the EMI payout annually as per your yearly budget. For example, when you suddenly get a raise in your monthly income or a consistent increase in income, you can make the needed calculations and add to the EMI amount to repay the loan faster. As a rule of thumb, for every 10% increase in your monthly income, increase your EMI payout by 5%. Even though the monthly reshuffling of EMI might appear like trouble, this can reduce your loan tenure considerably, and you can pay off the debt in a shorter period.
By adhering to these above-mentioned tips can help you make smarter online personal loan application decisions when applying for a personal loan. By making intelligent and well-informed financial decisions, you will be able to close the loan fast and also pay lower EMIs.
Keep in mind, when you take a personal loan for an amount that is more than what is required, you would needlessly end up paying more EMI every month. So, select the loan amount carefully, choose the best lender, crunch some numbers, and ensure you understand what you are signing up for. By ensuring that your EMIs are as low as possible, you can stay away from your personal loans from becoming a liability and maintain a strong credit profile as well.
Several financial institutions are there that offer personal loans with reduced EMIs. Several other facilities are there, wherein you can pay your loan amount back quickly, are also available to decrease the burden on customers. You can reach out to customer service if you need help at any time.
Get your loan with ease and help yourself build your dream house or dream vehicle. Use a loan calculator today to work out your EMI and plan ahead.