We, at Loan Singh, are flabbergasted to see the fate of our borrowers who default in their EMI repayments. It hurts us because despite being salaried, hardworking and financially independent, these individuals struggle to understand the importance of paying their EMI repayments on time. The reasons we get are varied with some simply procrastinating or some falling short of funds after spending more than what they earn. We hence thought on this piece about prompt EMI repayments. Our goal is to educate you and also to implore you to never delay or take your EMI repayments lightly. Millennials are so caught up with their daily professional lives that we tend to ignore our credit obligations. We fail to set-up a budget to compensate for absence of EMI repayments. We also ignore checking our credit report which houses all of our defaults and determine if we can get a loan, or not. Through this article, let’s understand why a personal loan is a good choice for emergency funds, how you pay back your personal loan, benefits of prompt EMI repayments and how you can do so smartly.
Personal Loan is the Cure
At times of financial crisis, there is no better option for quick funds than a personal loan with Loan Singh. This is because Loan Singh is a digital lending platform that provides online personal loans with no paperwork, no time delay and no inconvenience. A personal loan is unsecured – it does not involve any collateral or mortgage. This gives personal loans an edge over other secured loans, such as vehicle or home loans, because even if you don’t own any assets, you can still get funds for emergencies.
At Loan Singh, you can avail a personal loan for a number of purposes. You can avail a personal loan for purchase of household appliances, electronic gadgets, holiday travel, home improvement or renovation, relocation of job or medical expenses. All this is only possible, if you provide your latest 6 months bank statement along with your PAN details.
How to Apply for a Personal Loan At Loan Singh
Get Started Page – Select ‘PERSONAL LOAN’ from the dropdown and enter the loan amount with the desired repayment tenure.
Registration page – Add your contact number, personal email ID and corporate email ID
Social Authorization – Connect your Facebook, Google+ and LinkedIn profiles for discounted rates
Profile Page – Fill in your name, gender, father’s name, number of dependents and PAN Details. We use your PAN Card Number to check your Credit Score and to use it as a KYC document.
Address Page – Choose your type of residence; mention your street address, city, state and pin code.
Job Profile Page – Mention your current designation, total work experience, company name, highest qualification, last institution attended and monthly salary.
Financials page – Upload your latest 6 months bank statement either from your computer, GMail account or net-banking account directly.
Auto Debit Page – Provide details of your bank name, account number, IFSC code and permission so that Loan Singh can auto debit the EMI amount from your account every month. This way, you don’t need to set reminders or miss out on any loan EMI repayments.
How to Pay Back?
The personal loan you avail has to be re-paid to Loan Singh in the form of periodic payments (which includes the principal plus interest). This periodic payment is called Equated Monthly Installment (EMI).
The repayment of your personal loan depends on your income and repayment capability.
Before applying for the personal loan, you can actually calculate what can be your monthly EMI. On Loan Singh’s website, go to the Loan EMI Calculator icon and input the tenure and loan amount.
EMI (Equated Monthly Installments)
From Loan Singh’s perspective, if you are a salaried individual, there is low risk of default because thanks to the steady income you can make regular payments each month. An EMI is a fixed amount that you as a borrower need to pay to Loan Singh every month until the loan is repaid. It is essentially made up of 2 parts – The principal amount and the interest over that principal. This is then applicable across each month of the personal loan tenure. The EMI has to be paid to Loan Singh before the assigned due-date. The payment mode preferable for EMI payment is via auto-debit, internet banking or NEFT.
Equated Monthly Installments Calculation
You need 3 things to calculate your EMI – the loan amount, the interest you are levied to pay and the total period in which you and Loan Singh agree to complete the loan repayment.
Here P is the Personal loan amount, R is the yearly rate of interest and N is the loan tenure period.
From Loan Singh’s perspective, if you are a salaried individual, you show a capability to make the EMI payments regularly. But, making sure the loan EMI payments are done regularly without fail is based on your self-discipline. You can easily track your EMI payments and due-dates through Loan Singh’s loan management system.
Choose the EMI carefully. Ensure that you have the financials in place to be able to make prompt periodic EMI payments every month. In case you are not serious enough to oblige to Loan Singh’s repayment policy, then best is you do not apply for the loan. Ensure that you do not delay in your EMI repayments as this could lead to a penalty.
How to pay EMIs effectively
Let us look at some tips that can help you manage your finances better and stay prompt with your monthly payments.
Prioritize debt payments– Ensure that you are extremely prompt while clearing loan EMIs and other credit related payments. With all these payments getting registered with credit bureaus, it is important that you pay-off these debt payments to prevent a negative credit history and a fall in your credit bureau score. Keep reminders on your phone or login to the Loan Singh dashboard to keep track of the due-date and impending EMI payments.
Build a budget – A better way to control your finances is by creating a precise budget and sticking to it. A well planned budget will help you prevent over-spending. Your budget should include all your expenses – big or small. Tweak your budget according to the rise in your income. Revisit your budget every 6 months at least. Although it can be difficult, especially if you have high spending habits ingrained, a budget should be your priority to make your personal financial management work. This includes loan EMI repayments.
Track your expenses – Expense tracking is a habit that will ensure you keep track of daily, weekly or monthly expenses. This is important because in case you overshoot your budget, you won’t have the funds needed to pay the loan EMIs on time. Keep track of your bank account balance, store all your bills, ATM receipts, invoices, etc. so that you can match these values with your expense tracker. The tracker can be a spreadsheet or a diary. Categorize the expense with type, date and purpose. You will get to know how much you spent last week in restaurants or how much fuel goes into your motorcycle each week, etc.
Rainy day funds – An emergency fund gives you breathing space in case a calamity strikes. It will prevent you from looking for other options to pay your loan EMI, as well. Clearing a personal loan is a debt. It is best you clear only one instead of thinking of paying loan EMIs with your credit card limit. That is a big No!
5 Benefits to Making Prompt EMI Repayments
Making prompt EMI repayments is greatly beneficial towards your financial peace. Let’s look at 5 benefits of paying your personal loan EMI repayments with Loan Singh.
Build a Good Repayment History with Loan Singh to avail a second loan
Yes! That is true. The awesome thing about availing a personal loan from Loan Singh is the prompt repayment history you build. We appreciate your efforts to pay the EMIs on time and ensure you can then avail another loan faster than the first one. Please do not make it difficult for us, and for yourself, by defaulting in your EMI repayments.
Save More by Avoiding Added Charges on Default
Nobody wants to pay more for anything. You look at the cashier with aghast when he/she tells you “Sir! Your bill is coming to Rs.4999. Is it okay if I redirect your balance of Re.1 to the children’s fund?” While this is a noble thought, people always expect us to feel no worry to impart a little from what we already earn. You have so many other priorities to spend your money on instead of paying extra over a loan default.
Pay EMIs on Time to Prevent a Late Penalty
With a late penalty you not only have to spend more, you still have to face the ignominy of being a defaulter. It is a worrying sign. The prospective EMI repayments will have added reminders over SMS, Email and Call. Wouldn’t it be better if you set up reminders by yourself over your Gmail calendar, put up sticky notes on your fridge or simply provide Loan Singh with your details to auto debit the EMI amount before the due-date.
Boost Your CIBIL Score by Indicating Prompt EMI Repayments
We have been reiterating about building your CIBIL score since day one. A good repayment history with Loan Singh will allow you to avail a second loan without a hick, but this will also boost your CIBIL score to help you get a credit related to credit cards, secured loans, etc.
Trust Built Among Lenders Thereby Improving Your Credibility
Loan Singh’s digital lending platform allows lenders to invest their money to receive high returns. Now, if you pay your EMIs on time, it gives the lenders a sense of security that good borrowers are availing a personal loan. This not only convinces the lenders to continue investing their cash to serve your emergency requirements, but you can always remain assured of receiving emergency cash from Loan Singh’s platform.