4 ways to plan your personal loan EMIs effectively

Image Source: Google
Image Source: Google


While no collateral is required when applying for a personal loan, you still have to pay monthly installments regularly, to clear off the loan.

Viren Varma says that paying off his EMIs on time gave him an added advantage, “I am currently paying EMIs for a personal loan at Loan Singh. Their quick and easy digital process allowed me to get a personal loan within 2 working days. After a year of paying my EMIs regularly I cleared off my personal loan. This has helped me build a strong credit history with Loan Singh which will help me easily apply for future loans with them.”.

Here’s how you can be as efficient:

Chart it

  • The first thing to do is to figure out where you are spending your money other than on the EMI that you pay. Try to cut back on expenses that you feel you can reduce.
  • Learn to chart all your expenses so that you have an idea as to what income is coming in each month and what is being spent upon. Find ways to reduce it.
  • Other than the one-time expenses, try reducing expenses towards phone bill, electricity bill etc.


Split It

  • Keep a separate account for servicing the personal loan. This account should not be the same as your savings.
  • If married, you can split the handling of certain accounts between you and your spouse. eg. you can keep track of the household expenses while the other looks at lifestyle expenses.
  • This will make it easier to keep track and not burden you with multiple spends.


Emergency Fund

  • A sudden medical emergency or checkup can lead to an expense which you are not prepared for. So set aside a fund source which you can utilize in case of emergencies.
  • Another tip would be to make sure your emergency fund is big enough to support up to 3 months of EMI


Prepay if possible

If you get lucky and get that bonus or an unexpected windfall, use the funds to reduce the EMI amount or clear off the loan entirely.


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