A personal loan doesn’t have a limit to its end-use. You can use it to buy a 2/4-wheeler, finance a holiday, consolidate your debt, etc. Top fintech companies even offer instant loans on their online apps to help you meet urgent goals like medical emergencies. All you need to ensure is to repay the loan in time. So, here are some tips to avoid an EMI default on a personal loan this year and beyond.
Do you have unpaid credit card bills, loan EMIs, house rent or other dues? Then ensure to pay them off before applying for a new cash loan. As your debt-to-income ratio reduces, your capacity to repay a new loan in time will increase.
This is a primary thing to consider before taking a cash loan. Note your monthly salary, any salary hikes in the near future and additional income sources like rental income. Sum them up for an idea of your net monthly income. This can help you decide the loan amount you can afford to borrow and the duration over which you can repay it conveniently.
Keep in mind the goal you want to finance when choosing a loan amount. For instance, if you want a loan to pay your mobile phone bills, a cash loan starting from ₹1,000 can be enough. On the other hand, if you’re going to pay a rental deposit, a personal loan starting from ₹15,000 may be sufficient. So, if you have a small goal, avoid opting for too big a loan amount.
If you visit a traditional financial institution or a bank, the minimum loan amount offered may be significant. Therefore, it’s better to apply for an instant loan on the online app of a fintech company that provides loans of flexible amounts. Choosing the right loan amount will ensure that you can afford to repay it smoothly.
Tenure is the duration over which you need to repay a sanctioned loan. To avoid loan default, it’s essential to choose a suitable tenure as per the borrowed loan amount and your repayment capacity. You can do that easily if you apply for an instant loan online on a fintech company’s loan app. It suggests different tenures suited to varying ranges of loan amounts and eligible monthly salaries. Choose the most suitable combination to maximise the chances of paying off the EMIs in time.
Consider taking an income protection cover and/or a health cover to secure your cash loan from a loan app against an unpredictable job loss and/or an eventuality related to your health. In that case, irrespective of the unfortunate event, you can manage to pay off the loan easily with the insurance cover.