Why Knowing Your EMIs Matter Before Taking a Personal Loan
While planning for a personal loan, it is essential to know your Equated Monthly Instalments (EMIs) beforehand, as it is important for effective financial planning. Knowing your EMIs before applying for a personal loan helps you plan your monthly budget, choose the right loan amount, evaluate repayment capacity and avoid overborrowing. Let’s discuss the primary reasons that why you should understand your EMIs before taking a personal loan.
Top 6 Reasons to Know Your EMIs Before Taking a Personal Loan
Monthly Budgeting
Knowing how much you will have to pay per month shall help you manage your monthly budget and avoid financial drain. It also helps you plan your finances and manage funds for loan repayment without negotiating on necessary expenses.
Prevents Overborrowing
It helps you borrow within your budget or the amount you can repay in time. Knowing your EMIs beforehand prevents you taking a loan of larger amount that might not be repaid in time due to unforeseen circumstances. It primarily gives you an idea of the loan amount, interest rate and tenure, which are suitable for your income and expenditure.
Choosing a Loan Tenure
Calculating your EMIs can help you choose the appropriate loan tenure as per your requirements. If you opt for longer repayment tenure, your EMIs get lower; while a shorter loan tenure makes the EMIs higher but assures comparatively less interest overall. Therefore, choose the right loan tenure, as it is a key factor in managing finances and overall loan cost.
Enables Comparison of Personal Loans
You can check and compare multiple loan products from leading banks/NBFCs on Paisabazaar and evaluate which lenders are offering interest rate and loan amount as per your requirements. Once you are convinced with the offered interest rate, loan amount and repayment tenure you can apply it online to meet your urgent financial needs.
Helps in Improving Creditworthiness
Knowing your EMIs adds a sense of responsibility and awareness of paying the EMIs in time to avoid unnecessary penalties. This practice of paying-off all your EMIs in time not only improves your creditworthiness but also helps in availing various credit products in near future at competitive interest rates.
Using Personal Loan EMI Calculators
Before applying for a personal loan, it is imperative to use personal loan EMI calculator to evaluate your monthly budget, plan your finances and make informed financial decisions. The personal loan EMI calculator simplifies the process, while you enter the offered interest rate, desired loan amount and chosen repayment tenure to check EMIs and total interest rate.
Essential Tips to Consider before Applying for a Personal Loan
While applying for a personal loan, it is important to consider the following key factors to make an informed decision.
- Maintain good credit score (750+)
- Evaluate your repayment capacity
- Compare interest rates from multiple lenders
- Choose the right loan amount, as per your needs
- Use a personal loan EMI calculator
- Consider all the related fees and charges
Knowing your EMI before taking a personal loan is vital because it directly impacts your monthly budget and financial stability. While applying for a personal loan it is imperative to know your EMIs, as it makes you aware of the pre-existing and upcoming expenses. Personal loan EMI calculator is the precise online tool that assists you make informed financial decisions and helps in effective planning of long-term goals.
Therefore, if you are planning for a personal loan to meet expenses related to medical emergencies, wedding, education, travel, debt consolidation or any other urgency, knowing your EMIs are highly important and beneficial.