A personal loan can help you meet all your financial needs, such as handling a medical emergency, organising a dream family vacation or remodelling your home. Since a personal loan is unsecured, you do not have to pledge your assets for loan approval.

However, it is imperative to pay all of your loan EMIs promptly; otherwise, your credit score may suffer. Let us dive into the many ways in which you can plan your personal loan EMIs and manage your finances better.

Know your budget

• Making a thorough budget is the first step in managing personal loan EMIs. By analysing your monthly income and expenses, you can figure out what you can allocate to EMI payment without compromising other financial commitments.
• Set aside money for your loan EMI first in your budget, and cut out superfluous spending.
• Stay organised, keep track of your spending, and make sure you have enough money to pay your EMIs via a well-planned budget.

Choose a suitable loan tenure

• Making a sensible decision about your loan tenure is essential for organising your personal loan EMI instalments.
• Your EMIs are influenced by the loan amount, interest rate and loan term. You can choose a loan amount and tenure to make sure that your EMIs are affordable, while the lender determines the interest rate depending on your credit profile.
• Your EMIs will increase if you choose a shorter term, and vice versa. However, keep in mind that the longer the tenure, the more interest you will pay over time.
• Be aware of your financial resources and goals, and proceed with a tenure that suits you the best.

Utilise EMI calculators

• Utilise EMI calculators to calculate an estimated EMI amount determined by the loan amount, rate of interest and tenure. These calculators clearly display the monthly amount you will need to pay, aiding you in making informed financial decisions.
• You can evaluate different loan possibilities using these calculators, and then select the amount and tenure that best fits your financial position.
• Use IndusInd Bank Personal Loan EMI Calculator to find the best personal loan that suits your budget and fulfils your needs.

Repay on time

• To maintain a good credit history and avoid fines, EMI payments must be made on time.
• Set reminders or automate your payments to ensure you never miss an EMI due date.
• In addition to incurring fees, late payments have a negative influence on your credit score.
• Prioritise your EMI payments if you want to avoid extra debt and keep a positive credit rating.

Keep your repayment capacity in mind

• It is common to overestimate how much money you should borrow from a personal loan. You may think a large loan will solve all your financial needs in one go. However, doing so can get you in trouble.
• Overextending your borrowing capacity might have a negative financial impact. Make sure that you take into account your average living expenses and any debt you owe, so that financial management does not become an everyday hassle.
• When taking out a personal loan, be sure you are aware of the interest rate that is being given by the lender and the monthly payments that are required.
• You can alter your loan amount and tenure to arrive at a personal loan EMI that you can comfortably afford.

Keep an emergency fund

• Ideally, you should keep an emergency fund ready to pay off your loan if the need arises.
• Consider the possibility that you will not be able to continue making your personal loan EMI payments, if for instance, you lose your job or experience a sudden emergency that leaves you with significant financial obligations.
• In such circumstances, you can repay your loan using money from your emergency fund. 

Avoid taking multiple loans

• Taking out several loans at once can put a strain on your finances and make managing your EMIs difficult.
• Consider consolidating all your loans into a single personal loan or explore other debt consolidation options.
• With this strategy, the repayment process is made simpler, there are fewer EMIs to keep track of, and perhaps even better interest rates or terms are available.
• To make sure that the consolidated loan’s terms and conditions are in line with your financial objectives, carefully understand and review them.

IndusInd Bank can offer unmatched financial assistance and help you attain a personal loan at the most suitable terms. Let us explore the benefits of applying for an IndusInd Bank Personal Loan.

Why choose an IndusInd Bank Personal Loan?

• 100% digital and paperless process
• Competitive interest rates starting from 10.49% p.a.
• Flexible repayment tenures ranging from 12 to 48 months
• Loan amounts ranging from ₹30,000 to ₹5 lakhs
• Instant approval and disbursal of funds

Conclusion

Personal loan EMI management demands self-control, thorough preparation, and proactive money management. By setting up a budget, choosing the right loan tenure, using EMI calculators, and maintaining an emergency fund, you can ensure timely and smooth repayment of your personal loan. Keep in mind that a good credit history improves your chances of borrowing in the future, in addition to assisting you in reaching your financial objectives.

IndusInd Bank can be your trusted partner in securing a personal loan at competitive interest rates. The application process is 100% digital, allowing you to apply from the comfort of your home. So, what are you waiting for? Apply for a personal loan at IndusInd Bank today!

Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information.

Are you planning to apply for a personal loan online, but are concerned about how to avoid falling into debt traps? Debt can become a hefty burden if not managed well. It can increase financial stress, impede savings, and limit your ability to achieve future financial objectives. A debt trap is a circumstance in which you are compelled to over borrow in order to pay off your current debts. Over time, you find yourself trapped in an unmanageable financial situation that exceeds your ability to make payments, trapping you in a cycle of debt.

Read this blog to understand some crucial tactics to take into consideration in order to preserve a sound financial situation and avoid falling into debt traps with a personal loan. 

Understand what a debt trap is

When you take out a loan from a moneylender, two factors come into play: the principal loan amount, which is the sum you borrow, and the interest, which is the fee the lender assesses on the principal loan amount.

Every month that you pay back the loan, you contribute to both the principal and the interest. This is due to the amortising structures of most loans. This implies that each payment you make towards your loan goes to both the principal and the interest and that your loan is intended to be repaid over the course of a set number of fixed instalments.

You are most likely to get caught in a debt trap if you are unable to make your payments. Wondering how that happens? The interest keeps accruing and the principal does not decrease, making it nearly impossible to pay off your loan.

Create and maintain a budget

Make a sensible budget that details your earnings and outgoings. By sticking to your budget, you can avoid splurging on non-essential items and falling into a debt trap with an instant personal loan. Set aside money for savings while allocating monies for basics like rent, utilities, and groceries. You can prevent splurging on non-essential products by staying within your budget, thereby avoiding falling into a debt trap with an instant personal loan.

Keep an emergency fund

Create an emergency fund to cover unforeseen costs. Having a safety net allows you to cover unexpected expenses without resorting to credit cards or loans. Save enough money in your emergency fund to cover your living expenditures for three to six months. This gives you a safety net through tough times and stops you from using debt to cover emergencies.

Utilise temporary inflow of cash

Use any temporary inflow of money, such as an annual bonus, investment earnings, or the sale of property, to pay down high-interest obligations like credit card, personal, and auto loans. By paying off high-interest loans early, you save money that would otherwise go towards interest payments.

Spend wisely

Avoid giving in to the impulse to overindulge in luxury or unneeded purchases. Living within your means helps you stay out of debt. Impulsive purchases may result in needless debt. Spend some time determining whether a purchase fits with your needs and financial objectives before buying one. Put in place a waiting time before making a non-essential purchase, say for a week or 24 hours. This enables you to determine whether the purchase is indeed necessary or whether it was made on impulse, which might result in regret and debt.

Use your credit card effectively

Credit cards are practical, but if used irresponsibly, they can also lead to debt. To minimise interest fees, pay off your credit card balances in full each month. Be careful to pay more than the minimum payment if you are unable to settle the balance in full to avoid paying excessive interest. Maintain a low credit utilisation ratio and refrain from using your credit cards to the maximum. Review your credit card statements frequently to spot any mistakes or fraudulent activities right away.

Save up for major expenditures

Save money beforehand. By saving in advance, you can make these purchases without resorting to credit. Embrace delayed gratification and wait to buy until you have enough cash on hand to do so without using credit.

Why choose IndusInd Bank to get a personal loan?

Utilising a personal loan from IndusInd Bank to consolidate your debt will significantly lower your EMI payments, simplifying your life. The bank offers various personal loan products, including loans for debt reduction, medical costs, and education.

An IndusInd Bank personal loan can help you get the money you need for your particular needs because it has outstanding characteristics including a competitive rate of interest, flexible repayment terms, easy documentation, and instant approval. Additionally, you can use the bank’s personal loan EMI calculator to plan and budget your finances better. Take note of the following before you apply for personal loan with IndusInd Bank:

• You can get a personal loan from IndusInd Bank at competitive interest rates. 
• To submit a loan application, a borrower must be at least 21 years old and be able to provide the required KYC documentation. 
• The loan amount and interest rate will depend on your eligibility.

Conclusion

Although getting caught in a debt cycle can be extremely stressful and have a negative impact on your mental health as well as your finances, it is important to understand that not all debt is bad. Knowing the difference between good and bad debt can help you manage your financial obligations and avoid falling into a debt trap. IndusInd Bank can be your trusted partner in this journey. With its 100% digital application process, quick disbursal, competitive interest rates and flexible loan tenures, an IndusInd Bank Personal Loan can save you from falling into a debt trap. Apply now!

Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information.