Personal loans are an unsecured category of loans that do not require any collateral or security to meet short-term requirements. Both salaried individuals and self-employed borrowers can opt for personal loans that are easily available from banks, NBFCs and other financial institutions. However, personal loans also tend to have some of the highest rates of interest as compared to other types of loans. Hence, the EMI is generally higher in personal loans. Can you reduce your EMI burden?
Usually, a personal loan Is a very common loan product, and different sections of customer avail this type of loan for various purposes like buying white goods, traveling, buying vehicles, buying jewellery, wedding expenses etc. Also, some borrowers take personal loans to bridge the gap of funds for buying a home, paying own contribution, home renovation etc.
According to Pramod Kathuria, Founder and CEO of Esiloan, the EMI is calculated based on the loan value, loan tenure and interest rate. There are several key aspects that the borrower can consider for smartly planning the EMIs or reducing the existing personal loan EMIs. These are:
– Personal loans generally have very high interest rates as compared to other loan products. Hence it is very important to consider the major aspects in order to plan smartly EMI Or reduce existing personal loan EMIs.
Get the right category of loan. are for home improvement or buying a home home loans, home improvement, internal loans available through new home loans, and top-up loans that customers can consider. Since the rate of interest (ROI) is low and the tenure is high, the EMI with such loan products comes down significantly.
– Auto loan for new or resale purchase to be considered against personal loan to avoid high rates of interest. The tenure of the auto loan can be longer which can improve the EMI amount. Also, lenders often run attractive schemes with auto dealers that either reduce EMIs or offer discounts to customers.
– Transfer of loan – To reduce the EMI the customer can transfer the loan to a different lender who is charging lower interest and offers longer tenure.
Prepayment or part payment of the loan amount will help in reducing the EMI while keeping the tenure the same or can reduce the loan tenure.
– Adding a co-applicant to the loan can help in securing a better term and loan amount and hence provide more options for the customers.
The Easloan CEO said that common prudence for any loan product is to consider the right loan product for the purpose. Study the various options available, take the right amount of loan which allows the customers to pay monthly expenses and expenses without any added stress or without resorting to high interest rate credit facility. Paying EMIs on time and reducing such high interest rate loans.
Disclaimer: The views and recommendations given above are of individual analysts or broking companies and not of Mint.
catch all business News, market news, today’s fresh news events and Breaking News Update on Live Mint. download mint news app To get daily market updates.