2 min read
25 May 2021

Having a good CIBIL Score comes with a lot of benefits. Not only does it help you get fast approval on your loan application, but it also helps you get favourable rates of interest and higher loan amounts. The repayment of old debts contributes 35% to the calculation of your CIBIL rating. Thus, it is important for you to repay all your debts on time. When you already have a CIBIL Score of 700+, maintaining it is key to accessing finances when you need them at pocket-friendly terms.

Repaying your debts can be easy; all you need to do is follow a few simple steps. Read on to know how.

Plan your repayment in advance

Since you cannot always predict your future income and earnings, it is best to plan your repayment carefully. Look towards investments like fixed deposits, mutual funds or SIPs, and recurring deposits before you apply for a loan. Time your loan’s tenor in a way that your earnings from these investments will build a corpus of funds that you can rely on to make EMI payments. This can help you meet EMI deadlines when your income or other earnings are affected due to late salary payments or losing your job. Since not paying EMIs on time brings down your credit score and adds more financial stress with penal interest and EMI bounce charges, you should use a loan personal loan EMI calculator and organise your finances beforehand.

Set reminders for EMI dates or automate payments

Missing EMI payments attracts penal interest and other fines, depending on your loan terms. Thus, you need to keep track of your EMI due dates. Sometimes, you may miss the deadline as your attention is diverted towards other urgent tasks or because you are away on holiday. So, if you want to skip the hassle of paying it manually, set auto-ECS for your loan EMIs in your bank’s current or savings account. Your lender will generally send automatic messages to remind you about the EMI dates, and you can create monthly reminders on your email or phone calendar too. This will showcase your discipline towards repayment and boost your credit score.

Borrow from an NBFC for greater flexibility

The terms on which your lender approves a loan is a major deciding factor for your repayment. While rigid terms make repayment a burden, relaxed terms such as those offered by NBFCs can add more flexibility to your finances. NBFCS like Bajaj Finserv offer personal loans with tenors ranging up to 96 months on loans up to Rs. 40 lakh. Having a longer tenor can lower your EMIs, thus helping your clear your debt on time and maintaining your CIBIL Score simultaneously.

Additionally, Bajaj Finserv offers the Flexi loan facility to further aid your repayment. In this loan, you only pay interest as EMI for the initial part of the tenor. Choosing a variant like this will help you clear your debt more comfortably.

Bajaj Finserv also brings you pre-approved offers to simplify your application. All you have to do is share your basic details, check your offer, and get the money you need.

Choose fixed rate loans for convenience

Even though fixed interest rate loans are priced marginally higher than floating interest rate loans, it may be better to choose them since they help you calculate your EMIs in advance. Floating interest loans may increase your EMIs in the future, making it difficult to maintain timely repayment. This can hurt your credit score. However, it may also decrease your EMIs, making repayment easier. So, if you choose this interest variant, ensure that you have at least 6 months’ EMIs in savings to ensure an increase doesn’t throw you off track.

Implementing these techniques will make repayment of your existing debts easier, which will boost your CIBIL Score.

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