Loan Singh’s Weekly Special – Personal Financial Management



Financial Management, Pfft! You already know everything about it, right? Salaried individuals need no introduction to management of their personal finances. If the bills are paid on time and there is spare cash, at the end of the month, it is perfect right? It is good to have spare cash by the end of the month, but in no way can you shun from your credit obligations – such as payment for your Credit Card statements or your EMI repayments.

Loan Singh is a digital lending platform providing online personal loans to salaried individuals. Our goal is to make you understand the importance of financial management when dealing with personal loan EMIs. If you know why you need financial management in your life, then you will obviously go ahead and do it. Every individual has unique responsibilities and expenses to cater to. But we can highlight the generic ones. Many of our borrowers got an online personal loan approved thanks to a good Credit Score, and adequate salary, but still struggled to pay their EMIs and in turn got their CIBIL score affected. All you need to do is to instill some discipline in your financial management. Defaulting on EMIs is extremely bad and could hurt you in more ways than you expect. Before we dive into the details of financial management, let’s see what the benefits of prompt EMI repayments are. Once we see these benefits, it would make sense to then learn how to manage your finances well.


Timely EMI Repayment Benefits

Making prompt EMI repayments is greatly beneficial towards financial peace. Not just that, there are way more benefits of being prompt with your EMI repayments with Loan Singh.

Build a Good Repayment History

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.

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 EMI due date.

Get Your Credit Score Boosted

We have been reiterating about building your credit 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 credit score to help you get a credit via various credit instruments such as 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 good 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.

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.4,999. 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.


Financial Management

For salaried individuals, financial management deals with budgeting, saving, investing, spending and keeping track of all expenses. It also includes tracking of banking activities like withdrawals made, transferred funds, monthly statements of credit card, etc. Financial management helps us track our spending pattern which in turn helps us to gauge which are the expenses or purchases that do not add any value to our financial goals. Financial management helps you reduce risk. It involves looking ahead with a negative bias. Looking at the ‘What if’ scenarios and taking appropriate action. It signals when to stop spending money before you run out of it. Make allowances for unforeseen circumstances and treat savings as a priority.


Financial Management Problems

There can be numerous bottlenecks in the smooth running of your financial responsibilities. But you have to be serious about your credit obligations. Let’s look at some hindrances that could hamper proper management of your finances.

Exceeding the monthly budget

Crossing the monthly budget is a common occurrence among millennials, and should be avoided. If you consistently breach your monthly budget, then it’s time for you to re-plan and re-do your budget. Check what you are constantly over spending on. See if you are reviewing the expenses based on receipts and statements.

Unexpected expenses

You cannot predict when sudden expenses may come-up. Your laptop may breakdown and need repairs, the car might just stall one day needing engine work, a leakage in the ceiling just before rains, sudden hospitalization of loved ones, etc. are just some examples which can throw your savings out of the window. If you don’t plan a good budget, then these emergencies can prove costly.

Being lax about budgeting

There is a tendency among us to be lazy when it comes to keeping an eye on our budget. We take time to prepare a good budget and also have great money management ideas, but procrastinate over actually tracking and managing the budget. Or you may purchase 3-4 policies or make multiple fixed deposits hoping that it would be enough to manage our savings, and make little effort to review these investment instruments.


Managing Your Finances

Managing your finances needs you have a good deal of self-discipline, but it is not an impossible task. We are focusing on managing your finances to handle your credit obligations better. Some pointers are mentioned below.

Set financial goals

Writing down your goals will help you prioritize your spending. Prepare short term (achievable under a year), medium term (between 1-5 years) and long term goals (five years plus) on cards or stickers and put them up around the house.

For short term goals, you can work towards all of them at once. Look at how much you need. For e.g. purchasing a new laptop within the next 6 months. Have you started saving for it yet? Where can you allocate funds for that? Can Loan Singh be a good option for this? Have you checked Loan Singh’s eligibility criteria to see if you fit for a loan?

For long term goals you will have to plan a bit harder because you will have many expenses along the next 5 years. Divide your spending plan into separate categories with necessities taking priority. Groceries, utilities, insurance payment, policy payment, personal loan EMIs and credit card bill payments should take precedence over other expenses.

Create a budget

A budget guides your spending decisions, so that you spend on things that are important. It sets margins on spending, and by staying within those limits you can stay on track. The most important rule of a good budget is that – “Your Expenses should never be more than your Income”

Review earlier month expenses for inaccuracies or make corrections to the current month’s expenses. Use receipts, statements or bills to evaluate the accuracy on the expenses.

If your expenses cross your income, try and change your spending pattern to stay true to the goals you have set for yourself. Prepare a list before you go out shopping and buy only what’s on it. Avoid excessive use of credit cards, minimizing the chances of falling into credit card debt.

Track your spending

Track your expenses for a minimum of one month. The longer you track the better. Write down the purchases you have made in a notebook or an excel spreadsheet or use a smartphone app.

Use debit or credit cards for transactions, so you can maintain receipts which you can utilize when tallying expenses during the end of the month.

Keep all your financial information and budgetary paperwork in one place. This will save you time because when you do want to plan or assess your financial goals, you will find all the information easily.

Focus on savings and review

Savings provide you with a safety net during challenging times. You should save depending upon your financial goals. Start with around 10% of your income each month and then slowly increase it as the year progresses. Investment options such as mutual funds, recurring or fixed deposits are ways you can improve your savings in the long term. When you receive a raise in salary, use this extra cash to increase the amount of savings you maintain. Every once in a week, take time to review your budget and savings. See if you are on track with your financial goals. Check if you need to shift some amount from savings to emergency funds. Fine tune the financial plan, if need be.


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