A 2 Lakh loan can be extremely useful during urgent financial needs. Whether you want to meet a big-ticket expense with it or cover an emergency, it provides easy access to funds conveniently and quickly. These days, millennials also prefer to meet lavish goals like foreign trips, weddings, home renovations, etc. However, managing their EMIs efficiently is an important aspect of a healthy financial life. The good thing is that lenders like Hero FinCorp provide flexible repayment tenures, allowing you to pay off the loan gradually without stressing your budget.
The following sections explore ways to align the EMIs with your lifestyle, making the repayment process seamless for your financial routine. Save these Hero FinCorp tricks for better EMI management without delay.
- Compare Loan Plans to Get the Lowest Interest Rates
The method of determining the 2 Lakh loan interest rate varies between lenders. While some use the reducing balance rate method, others charge loans on the flat interest rate method. Irrespective of the interest calculation method, a loan with a higher rate costs more. Visit various lenders’ websites and compare their interest rates for the best deal.
Even with the same calculation method, your interest rate may vary based on your income, financial standing, debt-to-income (DTI) ratio, repayment capacity, credit history, etc. Therefore, keep these figures in optimum condition for better interest rates on Personal Loans.
- Choose Your Repayment Tenure Wisely
The repayment tenure you choose primarily impacts your EMI affordability. So, review factors like your monthly earnings and expenditures before deciding on a tenure. It will help determine the disposable income you can spend to repay your EMIs. Use an EMI calculator to arrive at a suitable tenure based on the Personal Loan EMI amount you can conveniently adjust into your monthly budget. At Hero FinCorp, you can choose a repayment tenure of up to 36 months.
Remember, a longer tenure reduces your EMI amount, making it easily affordable. However, it increases the interest outgo significantly, raising the total loan cost and making it costlier. On the other hand, a shorter tenure makes the EMIs heftier, but it leads to huge savings on the interest outgo. Using an EMI Calculator, you can opt for the shortest possible tenure with easily affordable EMIs.
- Create a Budget and Change Your Lifestyle
Begin by creating a budget outlining your income, expenditure, Personal Loan EMI schedule, etc. Doing this will give you a clear idea of your financial status and identify areas where you can reduce your expenses and allocate more money towards debt repayment. Little changes in lifestyle may go a long way in keeping your finances intact and ensuring you have enough money to pay the EMIs. It includes cutting down on luxurious spending, such as movie shows, dine-outs, weekend getaways, etc.
Avoid carrying credit cards when going to a mall. Make a list of things you need and carry limited cash to buy the intended items. This will automatically curb impulse spending behaviour. In this way, you remove any possibility of overspending, saving enough money to pay the 2 Lakh loan EMIs conveniently.
- Stay Abreast with the Deadlines
EMIs have monthly deadlines before which you must pay the Personal Loan EMI. Pay attention to them because missing even a single EMI may lead to penal interest and EMI bounce charges. Find details about these deadlines and the associated charges in the loan agreement your lender must have provided you. You can save monthly reminders in your smartphone calendar to avoid missing these dates. Activating the e-mandate is a fantastic way of automatically paying the EMIs each month without deliberately remembering them.
- Make a Full or Partial Prepayment
Loan prepayment is a great option to pay off the loan before its tenure completion. Generally, a 2 Lakh loan is an instant loan with a repayment tenure of up to 36 months. Most finance companies allow their borrowers to foreclose the loan after a minimum lock-in period. For a Personal Loan, you may prepay the loan after paying a nominal prepayment fee. It reduces the debt burden by lowering the loan balance and interest cost.
However, before prepaying the loan, enquire about the prepayment charges and the money you will save. Use surplus cash to prepay the loan whenever possible to minimise the debt burden and become debt-free sooner.
- Consolidate Loans
Managing multiple loans simultaneously, including the 2 Lakh loan EMI, makes you struggle with timely repayment. To ensure that you do not lag behind the repayments, it’s best to opt for a debt consolidation. It is an effective strategy to club all loans in a unified loan.
Instead of making several EMI repayments with varying interest rates, debt consolidation makes the repayment more convenient with a single monthly payout at a uniform interest rate. Borrow a debt consolidation loan at a lower interest rate than your current rate, making repayment and financial management better and easier.
- Get a Top-Up
If you have an existing loan and need more money to cover an urgent expense, you may take a top-up loan on your current loan instead of a new loan. Top-up loans come at more economical interest rates than credit cards and new loans. Apart from consolidating your loans, a top-up loan also reduces your monthly payouts. Plus, you service a single loan rather than spreading the finances across multiple loan repayments.
- Create a Backup Account for EMI Repayment
Create a small cash reserve with your savings before applying for a Personal Loan online. It helps build a corpus you may use to pay your EMIs. You can deposit the EMI amount and any surplus funds in a separate savings account. This backup account can be helpful whenever you face difficulty in paying Personal Loan EMIs from your regular income. This simple trick will ensure uninterrupted EMI payments without delay.
While meeting high-value expenses with a Personal Loan has become the norm, it is also essential for borrowers to repay their loans efficiently and promptly. The ultimate goal of these strategies is to reduce the debt burden while building financial stability. Borrowing a 2 Lakh loan from Hero FinCorp effectively meets your expenses and develops your credit history with regular payments using these tricks.
