Smart Ways to Manage Your Top Up and Personal Loans
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Smart Ways to Manage Your Top Up and Personal Loans

  • Highlights

  • Consider your loan repayment capability

  • Prepayment of loans decreases your loan burden

  • Regular EMI payments help manage the repayment schedule

  • Never borrow more than needed

With ever-increasing rates and challenging economic conditions, it’s getting difficult to buy the things that we want. While there is an option to borrow money from someone, there are other quick finance options available, too: like personal loans and top-up loans.

Taking a personal loan is a convenient and quick finance option, but the interest adds up the longer you take to repay. If you take a top-up loan as well, then you need to be secure about your income and the ability to pay back. Ideally, your EMIs should be less than 40% of your income.

Many people tend to take up loans even when their income is low, which leads to them facing a challenging situation in paying back what they’ve borrowed. Here are some tips to help you avoid getting in such a situation.

Pre-pay is the smart way

Prepayment means that you pay a higher sum of money towards the loan account. This will help reduce the tenor of the loan and also the principal amount that you owe to the financial institution. Hence, if you have any form of idle or unused cash it would be sensible to use it towards pre-paying the loan.

Get loans with shorter tenor

The tenor of a loan can change with different lenders and their respective schemes. Choosing a short tenor for your loan will enable you to manage your finances efficiently. This means you’ll have to pay fewer EMIs and will get freedom from the stress of repayment sooner. Loans with long tenor prolong the payments, and over a long term, can adversely affect your income and savings.

Do not delay EMI payments

Regular and timely EMI payments guarantee that your principal amount is repaid faster. If you fail to maintain the frequency of payments, the EMIs will pile up. Delaying EMIs could lower your credit score, which could hamper your chances of taking another loan in the future.

Flexi Loan Explained

Avoid over-borrowing

Do not borrow more than you can repay. This involves viewing your fixed expenses, observing your monthly expenditure over the last year or two, considering your job security, etc. Over-borrowing can cause you to pay interest for an amount you didn’t need at all.

Read terms & conditions carefully

Before taking a personal or a top-up loan, perform an in-depth analysis of the interest rates, monthly EMIs and also go through the terms and conditions. Get a loan when you are convinced that you have the financial backing needed to pay the EMIs on a timely basis with some amount left over for pre-payment.

With these things in mind, you can never go wrong with not just personal, but any kind of loan. Bajaj Finserv brings to you personal loans with competitive interest rates in the market. Also enjoy pre-approved offers for personal loan, home loan, EMI finance on different products and other financial services. Not only does this simplify the process of availing financing, but also helps you save on precious time.

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