Millennials like you and me are so caught up in the daily professional lives that we tend to ignore our financial priorities. We fail to set a budget, miss out on Loan repayments, miss due-dates of our credit card bill payments and never bother keeping an eye on our credit bureau score.

We at Loan Singh are left flabbergasted as to how some of our borrowers, despite being salaried and financially independent, struggle to pay their monthly EMIs on time. The reasons we get are varied – Some procrastinate, while some fall short of funds after spending more than what they earn. We, therefore, thought of writing this piece in order to educate borrowers on ‘personal loan EMI repayments’ and also on the consequences of becoming a ‘personal loan defaulter’.

Equated Monthly Installment

Loan Singh is a digital lending platform that provides personal loan online. In order to clear the loan, you need to pay off your loan in equated installments divided monthly (this includes the best interest rate).

This equated monthly installment aka EMI is essentially made up of 2 subparts – the divided principal amount and the interest over the principal amount. The EMI amount to be paid to Loan Singh can be easily calculated yourself by making use of the Loan Singh Personal Loan EMI Calculator. Input the EMI amount that you are sure to pay each month.

The EMI has to be paid to Loan Singh by the assigned due-date every month. During the quick personal loan application process, you can provide Loan Singh with a NACH mandate. This allows Loan Singh to auto debit the EMI amount each month. This way you don’t have to worry about any missed repayments. In case, however, the auto-debit does not trigger, you need to pay the EMIs via netbanking only. The benefits of netbanking include its security and transaction speed.

EMI Calculation

3 things are needed to calculate your EMI – the loan amount, the interest levied and the total time period for which the loan has been mutually agreed to be repaid in. The formula used is:

Here ‘P’ is the principal personal loan amount, ‘R’ is the yearly rate of interest and ‘N’ is the loan tenure period (in months).

Loan Singh’s personal loan dashboard gives you control to track your EMI repayments and avoid becoming a personal loan defaulter.

Tips for paying EMI repayments on time

Prioritize debt payments

Ensure that you are extremely prompt while clearing loan EMIs and other credit-related payments.

With all these payments getting registered with credit bureaus, it is important that you pay-off these debt payments to prevent a negative credit history and also to prevent a fall in your credit bureau score.

Keep reminders on your phone or log in to Loan Singh’s dashboard to keep track of the due-date and impending EMI payments.

Build a budget

A better way to control your finances is by creating a precise budget and sticking to it. A well-planned budget will help you prevent over-spending. Your budget should include all your expenses – big or small.

Tweak your budget according to the rise in your income. Revisit your budget every 6 months, at least. Although it can be difficult, especially if you have high spending habits ingrained, a budget should be your priority to make your personal financial management work. This includes loan EMI repayments.

Track your expenses

Expense tracking is a habit that will ensure you keep track of daily, weekly or monthly expenses. This is important because in case you overshoot your budget, you won’t have the funds needed to pay the loan EMIs on time.

Keep track of your bank account balance, store all your bills, ATM receipts, invoices, etc. so that you can match these values with your expense tracker. The tracker can be a spreadsheet or a diary. Categorize the expense by type, date, and purpose. You will get to know how much you spent last week in restaurants or how much fuel goes into your motorcycle each week, etc.

Rainy day funds

An emergency fund gives you breathing space during a financial calamity. It will prevent you from looking for other options to pay your loan EMI, as well.

Clearing a personal loan is a debt. It is best you clear only one instead of thinking of paying loan EMIs with your credit card limit.

Prompt EMI Repayment Benefits

Making prompt EMI repayments is greatly beneficial towards your financial peace. Let’s look at 5 benefits of paying your personal loan EMI repayments with Loan Singh.

Good Repayment History with Loan Singh to avail the second loan

Yes! That is true. The awesome thing about availing a personal loan from Loan Singh is the repayment history you build. We appreciate your efforts to pay the EMIs on time and ensure you can then avail another loan – faster than the first one. Please do not make it difficult for us, and for yourself, by defaulting on your EMI repayments.

More Savings by Avoiding Added Charges on Default

Nobody wants to pay more for anything. You look at the cashier with aghast when he/she tells you “Sir! Your bill is coming to Rs.4999. Is it okay, if I redirect your balance of Re.1 to the children’s fund?” While this is a noble thought, people always expect us to feel no worry when giving a little from what we earn. You have so many other priorities to spend your money on, instead of paying extra for a loan default.

On Time EMI Repayments Prevent Late Penalty

With a late penalty you not only have to spend more, you still have to face the ignominy of being a defaulter. It is a worrying sign. Wouldn’t it be better if you set up reminders over your Gmail calendar, put up sticky notes on your fridge or simply provide Loan Singh with your details to auto-debit the EMI amount before the due date?

A Boost in Your CIBIL Score

We have been reiterating about building your credit score since Day-1. A good repayment history, with Loan Singh, will allow you to avail a second loan without a hick. But, this will also boost your credit score to help you get a credit on your credit cards, secured loans, etc.

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