Personal loans are popular financial tools if you require quick access to funds. With features like no end-use restrictions and flexible repayment schedules, these forms of credit can be used for both planned expenses and unplanned emergencies.

However, availing a loan requires a certain amount of financial discipline with regard to the loan repayment. You have to repay the borrowed amount in EMIs spread over a specific timeline.

While it is crucial for you to scout for some of the best personal loans in the market before finalising an offer, it is equally important to pay your monthly instalments without defaulting.

Delaying your EMIs can lead to severe repercussions, such as decreasing your creditworthiness, attracting penalties, getting labelled as a risky borrower, and much more. So, simply avoid such hassles by ensuring you pay your personal loan EMIs without any delay.

Here are a few tips and tricks that can help you avoid missing EMI payments and stay on track.

Opt for an Auto-debit Facility

This is one of the effective strategies to ensure you do not default on your EMI payments. With most lenders offering auto-debit options, you simply have to activate this facility by informing your lender.

You need to provide a due date on which the EMI gets automatically debited from your account. With this automation facility, there is no need for you to remember your EMI due date. Thus, there is no risk of missed EMI payments as the right amount gets automatically debited.

However, ensure you have sufficient funds in your account to avoid any EMI payment being bounced. Maintain an adequate account balance at least a few days before your payment date to avoid the payment getting bounced.

Calculate Your Personal Loan EMI Before Availing a Loan

Being well aware of your finances is crucial before you apply for any type of credit. Compare and research various loan offers before zeroing in on a lender. This helps you analyse your EMI well in advance and gauge whether or not you will be able to manage your monthly finances.

A personal loan or PL calculator can come in handy during such times. Not only can you compare various loan options, but you can also compute your monthly instalments, helping you plan your finances better.

Using a Personal loan calculator is simple and hassle free. All you have to do is enter the loan amount you choose to borrow, the applicable interest rate and the loan duration. Within minutes, you get your personal loan EMI.

Being aware of your EMIs helps you assess your financial situation and decide if you can afford the borrowing costs. Be smart and scout for the best personal loans in the market to help you decrease your overall loan expenses.

Maintain an Optimal Credit Score

A credit score is a 3-digit numerical summary of your creditworthiness and is one of the critical factors lenders consider when approving a personal loan. As a personal loan is an unsecured form of credit, you need not pledge your valuable assets as collateral with the lender.

This increases the risk quotient of the lender, so lending institutions check your credit score to minimise the level of risk associated. A score of 750 and above is generally considered ideal by lenders. However, some lenders may also approve your loan if the credit score is above 700.

When you maintain a healthy credit score, lenders see you as a responsible borrower and sanction loan approvals instantly. Apart from this, you can also enjoy the benefits of lower interest rates.

A lower interest rate translates to smaller EMIs, helping you manage the amount without overburdening your finances. This way, maintaining a good credit score not only minimises your monthly instalments but also enables you to clear your outstanding without any delay. Hence, it is a win-win situation for you.

Categorise Your EMIs on the Basis of Priorities

It is essential to prioritise your EMIs, especially if you have multiple debt obligations. If you have availed a home or a car loan alongside a personal loan, you need to categorise your monthly repayments systematically.

For instance, if your credit card bill and personal loan EMI are due on the same date, you need to work out a plan wherein you are able to clear both payments without delay. Like personal loans, you may also activate the auto-debit facility for other loans to ensure you stay on track and do not miss any EMI payments.

That’s precisely why it is important to analyse your finances properly before opting for any form of credit. Always plan your budget well to avoid causing any last-minute stress due to missed EMI payments.

Analyse Your Overall Budget

As mentioned, you need to compute your monthly income and expenses before you plan to avail a loan. Gauge your current financial situation and plan a feasible budget depending on the available funds.

When analysing your budget, it is critical to check your overall debt obligations along with your total expenses and the maximum monthly income. This helps you determine your EMI repayment capacity, enabling you to pay your EMIs on time and without any delay.

Ideally, it is advisable to keep your total EMI obligations below 40% of the total income you earn in a month. This not only ensures timely payment of EMIs but also helps you meet other expenses as well. You may also use a PL calculator to calculate your monthly instalments, helping you plan your monthly finances better.

Choose a Convenient Repayment Tenure

The duration of a personal loan plays a crucial factor in dictating your loan terms. Most loan providers offer flexible tenure options ranging between 1 and 5 years. Hence, when comparing the best personal loans, you need to analyse the loan tenure properly.

This is because choosing a longer tenure can reduce your EMIs considerably. However, this can increase your total interest outgo and your overall borrowing costs. Act smart and choose a repayment timeline that best suits your monthly finances.

This way, you can manage your EMIs stress free and avoid missing EMI payments.

Following these simple and easy-to-follow steps can help you stay on top of your finances and avoid unnecessary defaulting on your EMI payments. However, you need to scout the market for the best personal loans and choose only those offers that best fit your finances.

Check if you meet the required eligibility criteria and clear your outstanding loan amount without missing out on your EMI payments. After all, paying your EMIs on time is critical to maintaining a sound credit history and assuring lenders of your creditworthiness.

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