Updated on: 10 April 2023
Published on: 19 October 2020
When it comes to loans, perhaps even before you finalise the loan amount, the first thing that comes to your mind is repayment. This is the right way to go about it as you are responsible for paying your loan on time. So, when you are borrowing, plan the budget accordingly and ensure that it accounts for all expenses, yearly and monthly. EMI payments are a key part of the loan experience and must not be overlooked.
Generally, your Equated Monthly Instalments (EMIs) depend on the amount of money you borrow and the repayment tenure. These factors, combined with the given interest rate determine your EMI amount. Failing to plan repayment can be stressful and may even hurt your savings. This is why we have curated a checklist to help you plan your monthly instalments on Instant Money Loans!
Here are 5 ways to plan EMI payments on Instant Money Loans:
This is considered to be one of the most important steps. When you’re availing an instant money loan, it is important to consider your overall expenditure and total income. This can help you determine the amount you have to repay every month through EMIs without affecting your finances.
Before figuring out the repayment plan, chart out all your expenses to understand where your money is spent and minimise unnecessary expenses. Moreover, it is also important to plan for emergency expenditures such as medical bills and family expenses, so that your loans do not affect your regular and household expenses.
To track your spends and plan EMI payments better, maintain separate accounts based on your expenses. This makes monitoring easy, efficient, and accurate compared to having a single account for managing all expenses. Additionally, you can also identify patterns and types of expenses that may be draining your savings.
Ideally, you should make a separate account to handle all your monthly instalments. This way, you can divert the required funds at the start of the month and ensure that your payments are done on time. While having a separate account and segregating the money, make sure you are disciplined and using the separate account for loan payments only. Do not use it on unnecessarily or for luxury expenses and ensure that you maintain the required balance so that your loan payments go through.
‘Do not save what is left after spending, but spend what is left after saving.’ This is the golden rule you must apply when keeping a tab on your expenses. For example, if you spend 10% of your salary on eating out every month, consider reducing it or finding alternative ways to fulfil that need. The more you save, the easier and better your EMI repayments will be.
By eliminating unnecessary spends, you pave the way for more stable finances down the line. You can even use a digital EMI planner to visually understand your monthly outgo and plan accordingly. The main takeaway should be to rethink your approach to finances and practice healthier money management habits, especially when repaying a loan. Mismanaging your money could lead you to miss loan payments and defaulting on your loan attracts a hefty penalty.
Loans can often have hidden charges that ultimately cost you more and make your EMIs unaffordable. You may also end up paying a huge sum every month, which may not be feasible for an extended period of time. In such a scenario, you should consider paying a portion of the outstanding principal ahead of time. This is called prepaying the loan and some lenders may charge a fee for doing so.
Hence, before taking instant money loans, look for companies that offer minimal prepayment charges. Fibe’s instant money loans come with zero prepayment charges if you decide to repay the loan earlier than the agreed duration. Plus, there are no other hidden charges too!
Due to the convenient and hassle-free nature of instant money loans provided by lenders such as Fibe (Formerly EarlySalary), you can take more than one loan provided you close one and then apply for your next loan. For instance, it isn’t uncommon to serve customers with a Fibe loan and SBI loan, both active and being serviced regularly.
In such situations, you should know to prioritise wisely. Based on the EMI amount you owe, the period for repayment, etc., sort these loans so you can first pay off the loans with the highest interest rates. If you miss paying a loan with a high interest on time, you can end up paying a heavy penalty than any other loan with a lower interest rate.
When it comes to borrowing money through loans, consider all the factors involved wisely. This includes the lender and you should pick one that has the right features for you. Fibe is one such lender to consider, as you can get a personal loan without any hassles. Thanks to the digitised process, you can skip the lengthy paperwork. You also have access to attractive interest rates with no prepayment charges.
Download the instant loan app here or simply log in to our website and be a part of the #OneInAMillion experience.
Category : Loan Management Tips
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