Personal loans are a great way to arrange for instant funds when you face a financial crisis. The loans are mostly over the counter products which are sanctioned instantly when applied online. Moreover, you get funds which can be put to any use and the loans do not even require any collateral security to be mortgaged with the lender. All these factors make personal loans the most sought after loans for financial requirements. However, personal loan interest rates are high since they are unsecured and have simple eligibility requirements. That is why you should ensure that you repay the loan on time as and when the repayment instalments fall due. To ensure that your personal loan repayment is hassle-free, here are some useful tips –
Avail what you can afford to repay
The first golden rule which should be followed when availing a personal loan is to choose a quantum which would be easy to repay. Online loan EMI calculators help you determine the EMIs payable for the loan amount that you seek. Work out the EMIs and see whether they would be affordable to be repaid before applying for the loan. If the EMIs work out to be high, reduce the loan amount to have affordable EMIs.
Go for a higher tenure
Personal loans allow tenures of up to 5 years for repayment. If you have availed a considerable amount of money as a loan, choose the maximum possible repayment tenure. Higher repayment tenures would reduce the EMI and make it easier to pay off the loan.
Check for prepayment facilities
In some cases, personal loan lenders allow prepayment of the loan where you can make a partial lump sum payment towards the outstanding liability to reduce the loan amount. Find out whether this prepayment facility is available or not. If available, check when you can prepay the loan and the applicable fee for such prepayment. When you have additional funds at your disposal, try and prepay the loan to reduce interest outgoes.
Arrange for ECS or SI facility for EMIs
To pay personal loan EMIs regularly, without default, you should arrange for an ECS facility or give a Standing Instruction to the bank to pay the EMIs as and when they are due. This would eliminate the possibility of forgetting the repayment date and incurring hefty late payment charges. It would also prevent your credit score from being hampered due to non-payment of dues.
Choose a loan with the lowest interest rate
The last tip is also the most important one. When choosing personal loans you should compare the available offers. There are dozens of personal loans available and when you compare you can find the loan with the lowest interest rate. A low rate of interest makes the loan affordable and easy to be paid back.
So, follow these tips and make your personal loan repayment hassle-free.