Unsecured Loan EMI Payment: Methods, Calculation & Management

Managing your finances effectively is crucial, especially when it comes to repaying loans. Bajaj Finserv offers flexible unsecured loan EMI payment options, making it easier for borrowers to stay on top of their commitments. Whether you are looking to understand EMI calculations, payment methods, or solutions for missed payments, this comprehensive guide will provide all the details you need.

What is an unsecured loan EMI?

An unsecured loan EMI (Equated Monthly Instalment) is a fixed monthly payment made by borrowers to repay their loan. Unlike secured loans, unsecured loans do not require collateral, making them accessible for individuals who may not have an asset to pledge.

Why EMIs are beneficial

EMIs simplify repayment by dividing the total loan amount, including interest, into manageable monthly instalments. This ensures:

• Predictable payments: You know exactly how much to pay each month, allowing for better budgeting.
• Financial flexibility: EMIs reduce the burden of paying a lump sum upfront.
• Ease of planning: Borrowers can choose a tenure that suits their financial capacity, ensuring affordability.

For instance, if you take an unsecured loan of Rs. 5 lakh with a tenure of 5 years, you can spread the repayment across 60 months, making it easier to manage your monthly expenses.

Calculating your EMI is essential to plan your finances effectively. EMI depends on three factors:

1. Principal amount: The loan amount borrowed.
2. Interest rate: The percentage charged by the lender.
3. Tenure: The repayment period in months or years.

EMI calculation formula

The EMI is calculated using the formula:
EMI = [P x R x (1+R)^N] / [(1+R)^N-1]
Where:

• P is the principal loan amount
• R is the monthly interest rate (annual rate divided by 12)
• N is the loan tenure in months

Example calculation

Suppose you borrow Rs. 3 lakh at an annual interest rate of 12% for 3 years:

• Monthly interest rate (R) = 12% ÷ 12 = 1% = 0.01
• Tenure (N) = 3 years × 12 = 36 months

Using the formula, your EMI will be approximately Rs. 10,007.

Pro Tip:

Save time and effort by using the Bajaj Finserv EMI Calculator, available on their website. It provides instant and accurate EMI details, helping you plan your budget effectively.

Choosing the right payment method is crucial to ensure timely EMI payments and avoid penalties. Bajaj Finserv offers two convenient options:

Auto-debit payments

Auto-debit is a hassle-free option where your EMI amount is automatically deducted from your bank account on the due date.

Benefits of auto-debit:

• Convenience: No need to remember payment dates.
• Penalty-free payments: Avoid late fees and missed payments.
• Improved credit score: Timely payments reflect positively on your credit history.

How to enable auto-debit:

1. Log in to your Bajaj Finserv account.
2. Navigate to the “Auto-debit Setup” section.
3. Enter your bank details and authorise the mandate.

Manual payments

Manual payments allow you to have control over the payment date and method.

Benefits of manual payments:

• Flexibility: Choose when and how to pay.
• Customisation: Ideal for borrowers with irregular income.

Payment methods for manual payments:

• Online payment via Bajaj Finserv’s secure portal.
• UPI, NEFT, or IMPS transfers.
• Offline payment at Bajaj Finserv branches.

Conclusion:

For seamless payments and peace of mind, opt for auto-debit. “Avoid late fees by activating auto-debit today!”