5 min read
20 Mar 2023
Personal loans are an excellent approach to meeting financial needs without putting your assets at risk. They can be obtained for a variety of purposes, including medical emergencies, home renovations, higher education and more. But in some cases, the repayment of the loan could become a hassle. Therefore, lowering your loan's monthly payments can help you reduce your total financial burden and allow you to put the money saved to better use.
Here are a few tips on how to reduce EMIs on your existing personal loan:
- Opt for balance transfer:
Consider a balance transfer as a solution if you are having trouble with high EMIs. To do this, you will need to transfer your existing loan balance to some other bank or NBFC which has a lower personal loan interest rate. By doing this, you may be able to lower your EMI considerably and save money on interest charges over your loan tenure. Before you decide to do a balance transfer, make sure to consider prepayment fees for your existing loan, and other charges levied by the financial institution for the new loan. This will help you decide if it is the right choice for you in terms of overall borrowing cost. - Choose Flexi Hybrid Loan:
If your personal loan EMIs are becoming expensive and are putting a strain on your finances, you should convert your loan to a Flexi Hybrid Loan. With a Flexi Hybrid Loan, you can make interest-only EMIs during the initial part of your loan tenure, which will result in lowering your personal loan EMIs for a part of the tenure.
- Part-prepay your personal loan:
Part-prepayment is when you pay back a portion of your loan that is more than one EMI. However, there is no maximum limit that you can part-prepay. Prepaying a portion of your loan reduces the principal amount, which thereby helps you reduce your monthly EMIs on a personal loan. If you have extra cash and you want to reduce your EMIs, you can choose a part-prepayment facility and pay off your debts earlier than expected. Depending on the borrower's decision, this can result in either lowering of your EMIs or shortening repayment tenure. It is advisable to know the lender's repayment fees and charges to avoid unexpected penalties.
You can make use of the personal loan EMI calculator to understand your monthly repayments in advance. It can significantly reduce the manual calculations involved in figuring out the EMI for a personal loan. You can get an estimated EMI by simply entering the loan amount and loan tenure into the calculator. This saves the time and effort that would have been required to manually calculate the EMI. The personal loan EMI calculator also enables borrowers to adjust the loan amount and the duration of the loan to get an EMI that fits their ability to repay.
