A personal loan is one of the most sought-after debt products that allow individuals to meet almost every possible financial need. These debt products can be utilized to cover hospital bills, expenses of a marriage function, to pay for higher studies, or expenses of an exotic vacation. These loans are unsecured in nature and hence, there is no involvement of any collateral or mortgage as such to avail them. Depending on your chosen bank or Non-Banking Financial Company (NBFC), you can avail as much as Rs 25 lakhs. Moreover, some of the lending institutions (NBFCs primarily) provide approval on personal loan applications almost instantly and disburse the loan amount in less than 24 hours. This is a highly useful feature, more so when you need the funds for medical emergencies and similar situations.
Repayment of loans involve paying monthly EMIs that have to be planned well, before actually applying for and availing the personal loan. Here is a list of reasons why being regular with your loan repayment is important:
- Regular repayments help you build a clean and favorable credit report for yourself- this secures your financial future and makes you a good candidate for any future loan you wish to avail. Not only will you qualify for the loans, but it will also increase your chances of availing loans at a lower rate of interest.
- Consistency in servicing your debts will keep your credit score intact and increase it gradually. This makes you an ideal borrower for a loan or a credit card.
- You build your financial credibility in the eyes of your lender and it shifts the trust factor in your favor. With that, you can build a better relationship with your lender and avail better offers on their products.
- How you repay your personal loan today will impact how your future loan applications are treated by banks and NBFCs. Regular EMI payments will ensure that your loan applications in the future are approved faster and you get more favorable terms of lending.
With a good grip over your monthly outgo and by creating a budget, you can easily manage your personal loan EMI. Before actually availing the loan, you can use the online Loan calculator to get a tentative idea of how much your EMI outgo will be for a particular loan amount.