Personal loans help us accomplish a number of life goals in addition to promptly fixing our financial issues. Right? Personal loans can be utilised to help with a range of purposes, such as financing for a child’s college education and future marriage as well as home renovations and business expansion.
Therefore, it stands to reason that most applicants would breathe a sigh of relief when their application was rejected, especially after going through the entire process of estimating the loan amount, finding a suitable lender, choosing the right tenure, receiving Cashbean loan approval, and finally having the loan amount credited to your bank account.
Don’t, however, think that your work is done. Once the personal loan amount has been credited, how you handle the EMI repayment will have an impact on your financial future.
Now, let’s discuss some very intelligent choices you can make to manage your loan at the current personal loan interest rate while also ensuring the stability of your financial condition.
Never put off or forget an EMI for Moneyview personal loan.
When repaying a personal loan or any other form of loan, you must make it a point to always pay the EMIs promptly and in full. Your credit score and report are both positively impacted by your EMI repayment discipline and consistency. Consequently, a high credit score can assist you in obtaining personal loans with lower interest rates from Cashbean.
However, keep in mind that any form of delay in loan repayment has the potential to significantly damage your credit score, even if you took out the loan at a low personal loan interest rate. Along with the imposition of appropriate penalties for the delay or, worse, default, the damage to your credit score will also reduce your future loan eligibility and approval prospects.
When you receive a bonus or other extra money, you can prepay Moneyview loan in full or in part
Prepaying your personal loan is a smart move, whether it be in full or in part. The overall cost of personal loan interest rates may be significantly reduced as a result of this activity.
Therefore, do everything possible to prepay your loan EMIs in full or even in part whenever you have additional money, such as from annual or seasonal bonuses or the maturing of investments.
Prepayment penalties are occasionally imposed on fixed rate personal loans by the lending institution, however they are normally not required for floating rate loans due to RBI regulations. Therefore, do your homework before making any prepayments to guarantee that the prepayment fees are always outweighed by the savings in the overall interest paid, as calculated by the applicable personal loan interest rate.
And that’s not all. Make sure to weigh the opportunity cost of investing vs choosing to prepay personal loans with the extra cash. The predicted profits on investing the money in this circumstance are the opportunity cost of not investing, which you would prefer to avoid by choosing to prepay your personal loan instead of investing.
Use the balance transfer option when it seems possible
While making payments on your Cashbean personal loan, it is advisable to constantly keep an eye on the rates, conditions, and services that other lenders are providing for personal loans. If another lender is offering you a lower interest rate and better service terms for your present loan, try first to request a lower interest rate from your current lender.
You should proceed and consider shifting the remaining balance of your personal loan to a better lender if the lender denies your request because doing so would help lower the total interest paid on the Moneyview loan.
But be aware that the new lender will frequently regard your request for a balance transfer as a completely new personal loan application. Therefore, take care to account for all possible expenditures, including processing fees and other associated charges like administrative fees. Be careful to only proceed if the overall savings realised by shifting your personal loan balance outweigh any fees or penalties that may be incurred.
Additionally, certain personal loan providers may offer a top-up option on balance transfers depending on your eligibility and the current personal loan interest rate. You can choose this option if you need a bigger loan sum for a balance transfer to Moneyview.
Never withdraw money from your emergency fund until it is really required.
A sizeable emergency reserve that is at least six times your essential monthly expenses will help you deal with financial situations like an unexpected job loss or a catastrophic illness. Unless you are having difficulties making your EMI payments, avoid using your emergency fund to pay back your loan.
In addition, when planning to prepay your personal loan and calculating the amount you have available to do so, be careful not to exhaust your resources and leave yourself with insufficient reserves to keep liquidity. Remember to always have an emergency reserve that is at least six times your minimal monthly costs and that you should never touch.
Check the income-to-EMI ratio at present.
Make sure not to disregard your current FOIR before applying for a new loan if you are qualified to do so and are currently repaying your Cashbean loan at a low personal loan interest rate. The percentage of your monthly net or gross income that is already going toward paying debts like credit card bills, loan EMIs, and other debts is known as your fixed obligation to income ratio, or FOIR. If you have a high level of FOIR, which demonstrates that a sizeable portion of your monthly income is going toward EMIs and other commitments, a personal loan lender may assume you have a higher likelihood of defaulting on future EMIs. Thus, your chances of getting a personal loan may be diminished.
Always make sure that this ratio is under 50% before moving through with a new Moneyview loan application, of course taking into consideration the anticipated EMI for the new loan. Consider paying off your present loan’s EMIs, seeing it through to completion, or even prepaying if you can before taking out a new loan if it is going beyond that. Try to pay off the loans with the highest interest rates—personal loans—first.