The only criterion for deciding on a personal loan is not  how easily the loan is available. Just because personal loans are easily available, don’t take them out on an irregular basis. If you make wise decisions, you can live a life free of financial stress. Otherwise, you will end up paying EMIs for the rest of your life.

 There are various ways to reduce your personal loan EMI.  Borrow only when you need it: Personal loans are easy to obtain and the qualifications are high, but you should discuss the amount you actually need and borrow within that range.

 Otherwise, you will find yourself in unnecessary financial hardship in the future. The EMI may seem affordable at first as it depends on the loan amount. However, if your income remains the same but your financial obligations increase, it can become difficult  to repay your loan on time.

 To make the EMIs worth your wallet, you should borrow only  the amount you need. Conduct market research to determine the best deal. Another factor on which EMI depends  is the interest rate.There are several providers on the market that offer personal loans at  competitive interest rates. Compare the current interest rate and the  EMI for your desired loan amount  and choose the best deal. For comparison, you can use the personal loan EMI calculator  in Excel.

 Choose a longer term: The term of the loan also plays an important role while determining the EMI. If you are young and plan to work for years to come, you can opt for a longer tenure to reduce the EMIs on your personal loan. If your financial situation allows, you can make prepayments to shorten the term and pay off your loan before its due date.

 Ensuring on-time repayments: EMI defaults are the biggest problem in lending. The concept of EMI  was introduced to simplify loan repayments  by paying a fixed amount every month. Loan repayment becomes stressful when the repayment amount increases due to EMI default. Moreover, in case of missing EMIs, you will have to bear  additional costs in the form of penalties. Another effect is a deterioration of your credit score, which will affect your future loan applications. To prevent this from happening, you need to repay your loan promptly.

 Decoding the fine print: You should always read the fine print in the terms and conditions to understand if there are any hidden  additional costs beyond interest, such as: Examples: processing fees, garnishment fees, late payment fees, etc. These charges may come up unexpectedly and  increase your EMI payments.

Annual EMI Revision: Many lenders offer the facility of revising your EMI every year as per your income growth. This allows you  to pay off your loan  before it’s due, reducing the overall cost of your loan. Prepay whenever possible. Make regular advance payments apart from regular EMIs. This shortens the term of the loan and reduces interest costs on the  loan.

 Consolidate your debts: If you have multiple loans and  have  to pay multiple EMIs, you can save yourself the hassle of EMIs by consolidating all your debts. If you take a personal loan and repay all your small loans, you won’t have to remember multiple EMI due dates. This will help you pay off your loan quickly and maintain a good credit standing.

 Know your  EMI in advance: Calculate your EMI using  online personal loan EMI calculator before applying.