There are many occasions in life when you need money on an urgent basis. Unforeseen contingencies and unplanned expenses may force you to use up your savings. Very often, a personal loan can help you tide over financial emergencies. These loans are easily available in India and calls for little documentation. These are unsecured loans and do not need any collateral.

There are many banks and NBFCs that offer personal loans at favorable rates. It is important to research the personal loan offers from various lenders before you decide on the most appropriate loan for you. You need to choose an EMI that you can manage without compromising your family’s current lifestyle. Poorly managed loans can derail your financial credibility and may even pull you into a debt trap. You can use personal loan calculator in order to find out the EMIs for various loan amounts and tenors.

Here are certain tips to manage your personal loan EMI payments.

  • Choose a loan after careful analysis

It is important to do your research before you decide on the appropriate loan for you. Compare the interest rates offered by various lenders before choosing one. Always look for loans that give you the liberty of pre-payment and foreclosure of loans without any penalty. Ease of documentation and processing is another factor that you need to consider in your choice of loans.

  • Choose an EMI amount that is comfortable for you

The EMI calculator is an online tool that can help you to know the EMI amounts for various loan amount and tenor. Let us take the example of Bajaj Finserv EMI calculator. The main components of this calculator are the:

  • Loan amount
  • Interest rate
  • Loan tenor

You need to fill in these details in the columns provided in the EMI calculator. The Bajaj EMI calculator will now give you the amount of EMI that you need to pay every month.

The general formula used for calculating the EMI is as follows:

EMI= [P x R x (1+R)^N]/[(1+R)^N-1], where:

  • P is the principal amount or the amount that you wish to borrow
  • R is the rate of interest that is applicable to the loan amount
  • N is the tenor of the loan or the number of EMIs that you need to pay

The thumb rule is that the sum of all the EMIs that you pay for all your loans should not exceed 30% of your monthly income. So, if your monthly income is Rs. 50,000, the combined EMIs should not be more than Rs. 15,000.

  • Maintain a good credit score

A good credit score can help you get a lower interest rate on your loans, subsequently lowering the EMI amount. It is important to ensure that your credit score is closer to 900 at any point of time. This will enhance your financial credibility in the eyes of prospective lenders and avail a loan at a competitive rate of interest.

  • Never delay or miss an EMI

Most loans come with a penalty for delays in EMI payments. Missing an EMI can attract charges and create a dent in your credit score. Timely payments can save you from late payment charges and can help you to maintain a good credit score. An impeccable repayment history can help you avail loans on better terms in the future.

If you are looking for a flexible personal loan that offers simple and fast processing, Personal Loan can be your best bet. Along with minimal documentation, you also get a benefits from flexi personal loan facility, which helps you to withdraw funds as and when required from the approved loan limit