7 Ways You Can Avail of Personal Loan at Low EMI
A bank loan can be your best buddy to sail through financial hassles. However you need to ensure that the monthly repayment load is in sync with your repayment capacity. More so, amidst current pandemic situation, it is important to keep the EMIs low so that it doesn’t impact your day to day lifestyle.
Whether you are planning to apply for Personal Loan or are already serving EMIs for existing account, it will be useful to know how to keep monthly repayments low. You can use repayment flexibility to modify your present day EMIs in face of temporary cash crunch.
As far as you meet the basic Eligibility for Personal Loan the lender will be happy to set the terms and conditions of loan as per your financial situation. Herein you must know that, besides the basic eligibility criteria such as age, income, & credit score your bank will also check your NMI/EMI ratio and repayment intent.
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Now let’s list out some of the lesser known ways to cut down EMI of Personal loan.
Step Up EMI
Most borrowers opt for flat EMI repayment structure wherein a fixed instalment is set for the entire duration of loan. However, this is not the ideal way of repaying your loan. By opting for flexible repayment structure like Step Up Loan EMIs, you can choose EMI repayment as per your financial health. As the name suggests, the Step EMI structure allows you to repay lower EMI in the initial phase of loan and the size of EMI steps up gradually during the loan’s duration. You can opt for HDFC Step up Personal Loan and choose the EMI as per your current cash flows.
Another lesser known ways to keep lowest EMI burden is by opting for balloon repayment structure. By opting for balloon loan, you sign agreement to repay the loan principal in one instalment at the end of loan tenure. Through the loan duration you repay interest only EMIs. One of the classic examples of Balloon loan is Gold Loan.
Pledging security- Gold, car & investments
It is well known that lower rate of interest leads to lower EMIs. However do you know the type of loan you opt for also determines your interest rate? If you opt for a secured loan your EMI will be smaller in size. So consider opting for a Gold Loan, Loan against Mutual Funds, Fixed Deposits, pre-owned car etc to keep the interest outgo low. This will make least disruption to your current cash flows.
Adding a co-borrower
The rate of interest on a loan is directly proportional to risk premium lender bears on each account. As you add a co borrower, a loan guarantor or pledge a security, you decrease the risk factor substantially for the lender. Thus, expect lower cost of loan when you add a co borrower, particularly a family member or spouse along the Personal Loan application.
Using Loan aggregator’s help
Professional help can help you find out a host of Personal Loan offers from different lenders in shortest possible time. All you need to do is fill a form online and you will get access to the best Personal Loan Interest Rates available to match with your profile. You can compare and apply within a few clicks.
Going with the help of a loan aggregator you also save a risk of losing credit rating due to rejections. The loan professional will share your application with chosen lenders only.
Balance Transfer or switch to EBLR
Another effective way to reduce loan rate could be opting for EBLR (external benchmark lending rate like repo rate linked rates) from MCLR based interest rate. This can reduce your interest rate by 100 to 150 bps in many cases, and thus can save you a significant pie.
However if you did use moratorium, you may not be eligible for balance transfer to another lender. Though you can opt for switching rate regime through your lender only. This is one of the best ways to reduce cost of interest rate for Home Loans.
Being prepared- using EMI Calculator, handy documents & Power of Negotiation
One of the best ways to cut down interest rate is using the power of negotiation. If you can confidently present your case and ask for the best deal, the lender is likely to give you the best offer indeed. All you need is the right preparedness. That is, you should have all the documents handy. Use EMI calculator and assess how much instalment you can pay conveniently each month. When you do your home work, the lender gets to know your intent for repayment.
In all, following these points you can grab the best Personal Loan offer and meet your goals without any hassle.
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