Personal loans that are available with quick processing time are handy and come very useful just when they are required. A personal loan is mostly upto a limit of Rs 5 lakhs and is payable within 3 to 5 years. Higher loan amounts and longer repayment periods are privileges that are given to regular borrowers with a good credit rating, good creditworthiness, and good relations and trust with the lending agency. The EMI, or the equal monthly installment, has become the most popular and convenient way to repay a loan. Most personal loan apps have a built-in EMI calculator, and loan applicants can decide on the amount of loan they want with a choice of the repayment period. The EMI depends upon the interest rate and the term of repayment. Most applicants choose personal loan amounts based on the amount of EMI they are comfortable paying monthly.
Tricks of the trade
There are plenty of loan apps, such as paysense, and the best loan app also provides useful guidance to manage debt effectively and finances. Once the loan amount and the EMI are decided, there are ways to manage repayment, and here are some tips that will help borrowers manage their personal loan portfolio effectively.
The first and foremost thing to keep in mind is to do the things that reduce the amount of interest. Interest can be reduced by reducing the credit rating. The way to do this is to clear off old debts and any due payments that can adversely affect the credit score. This should be done even before applying for a personal loan.
The tenure of personal loan repayment should be as low as possible. A higher tenure only increases the interest component in the personal loan. The best loan app has attached blogs on personal finances and ways to manage EMI effectively.
Care should be taken when comparing personal loan apps and the facilities, along with their flexibility. The best loan app will permit payment of extra EMI's in schemes that are known as part foreclosures. Most salaried people receive annual bonuses, and many prefer to reduce their loan burden by paying extra EMI. Applicants need to choose and select the best loan app that not only permits paying extra EMI but does not charge any fees for accommodating extra EMI. The faster a personal loan is paid off. The lesser is the overall interest on the personal loan.
Another way to reduce the interest burden and manage a personal loan is the balance transfer process. This has become very popular, and people keep shifting the balance portion of their loans to a lender that charges lesser interest. The applicant simply arranges to transfer the balance portion of an existing personal loan, and the new applied lender will pay the balance to the existing lender, and the applicant will now need to pay the recalculated EMI's to the new lender.
Another great way to manage a loan is to avail the other benefits that the best loan app provides. Most loan apps allow consolidation and management of finances. It is a wise step to go for a loan app that allows its users to also avail of features such as buy now pay later facilities. In fact, people need to use apps such as these that also allow personal loans. The advantage of this strategy is that people can use the app for purchases and get benefits such as extended credit on purchases, bill payments, and even business transactions while also getting bonuses such as cashback and discounts. Over and above, the apps also provide personal loans. Such apps are a great way to manage expenses as well as avail of a personal loan when required.
Most people make investments while also taking a personal loans. Some investments, such as those that are equity-based, have to fluctuate NAVs. It makes little sense to nurture an investment with low returns while paying higher interest on a personal loan. It may be a good idea to encash or preclose an investment or even take a partial withdrawal to pay off a loan.
Making the most of things
Every problem has a disguised opportunity, and there are ways to manage EMIs effectively and control repayment to the benefit of borrowers.