People usually take up a Personal Loan when they are in dire need for an immediate finance, they go in for a home loan. Since home loan can be used for multiple purposes, it is quite popular among the borrowers. A personal loan is like a savior when there is a shortage of money.
However, you have to be really careful when you are going in for a personal loan. It is important for you to choose the right kind of personal loan so that you can avoid any trouble or discomfort when you are paying back the loan.
Here we will tell you the golden rules of loan repayment.
Zeroing on EMI – This should be your priority when you go in for a home loan. It is important for you to choose an EMI which you can afford to pay. The industry experts feel that your EMI should not be more than 40% of your monthly income. The whole idea behind this is that EMI should not bear a burden on your daily expenses and affect your normal lifestyle.
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Pay Less Interest – If you want to pay less interest, you should choose low number of EMI whose interest is high. Now you might be confused as it might seem contrary to the previous point, but in the longer run you will be spending less amount on the interest.
Steer Clear of outstanding EMIs – One aspect of EMI which you have to keep in mind is that you have to make sure that you pay all your EMIs on time. Delaying the payment of your EMI won’t only affect your credit score, it will also attract a penalty for late payment of EMI amount. If you feel that you won’t be able to pay the EMI on time, tell it to the bank and ask for an extension of date.
Have the money, prepay the EMI – If you have those extra green bucks, you can always prepay your EMI loan. This will work in two ways, firstly you will be glad that the debt amount has lessened before time; secondly it also leads to less interest payable to bank. Now there are some banks which charge penalty if you pre-pay your EMI, hence it is important to choose a bank which has negligible or minimum prepayment charges.
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