3 Things To Know About Personal Loan Repayment



Our life is full of uncertainties, throwing surprises at us at every moment. In times of an emergency or urgent cash requirements, we can always rely on a Personal loan. A Personal loan is a good option as it is unsecured; no mortgage or guarantee is required.  Digital lending platforms offer online personal loans with minimal paperwork and verification time making it a good source for emergency funds.

Personal loans can be availed by salaried professionals for a number of reasons such as purchasing hi end gadgets, holiday trip, home improvement, medical expenses or celebrating a wedding.

When you borrow from a financial institution such as a bank or digital lending platform, repayment of the personal loan dues through periodic payments include principal payment plus interest. This periodic payment is called an Equated Monthly Installment.


How is the personal loan EMI calculated?

The formula to calculate an equated monthly installment is:





Here P is the personal loan amount, R is the yearly rate of interest and N is the loan tenure period


Digital lending platforms help you check your loan EMI by making use of an EMI Calculator. The calculator takes as input the EMI amount you are capable of paying and the tenure you want the loan for, and calculates the loan EMI amount for each month. This will let you know if you are financially capable of paying the EMI each month.

Once you take a loan, digital lending platforms allow you to track EMI payments and due dates through their loan management system.


Things to keep in mind while applying for a personal loan

  • Choose the EMI carefully – Ensure you are able to afford the EMI every month. In case you are have trouble paying your credit card bills or do not have enough balance in your account to allot for the EMI, and then select an EMI amount that is feasible. Ensure the EMI payment does not disrupt your monthly savings budget.
  • Prepayment of loan – In those instances when you receive a bonus at work or save enough in your budget, opts to clear the personal loan ahead of the loan payment tenure. Banks usually charge a prepayment penalty for clearing the loan early, unlike digital lending platforms.
  • Interest rates – While applying for a personal loan at banks keep an eye out for the interest rates. Banks charge a fixed interest rate on the EMI which does not fluctuate during the tenure of the personal loan.
  • EMI payments – Ensure that you do not delay in your EMI payments as this could lead to a penalty which is a percentage of the EMI you pay. Avoid these extra charges and expenses by being prompt with your EMI payments.


Failure to make an EMI payment could lead to

  • Credit bureau score hit – Missing an EMI payment can affect your credit bureau score badly. Credit bureaus maintain the records of your financial information collected from banks and lending platforms. If you miss out on EMI payments then this indicates that you are not prudent enough with your loan responsibilities.
  • Risky borrower tag – Along with a drop in credit score points, you will also be tagged as a ‘risky borrower’ by the credit bureau. This will affect your chances of getting a loan approved in the future because banks and digital lending platforms will look at how you maintain your credit history and wouldn’t want to lend to a risky borrower profile.


Types of loan repayment options

Selecting a flexible loan repayment option holds a big advantage in case you find it difficult to repay the loan. You can opt for any one of the following loan repayment options at banks or financial institutions.

  • Accelerated repayment option – As the name suggests this option allows you as a borrower to increase the EMI amount each month. You could do this in case you receive a surplus in income via increment or get a bonus. Increase in the EMI amount can save the additional amount you would have spent in the form of interest on loan taken. This is better than reducing the loan tenure because by reworking the existing EMI you can repay the loan faster.
  • Step up repayment option – In case you are a new salaried professional your salary is bound to start low and then increase as you gain experience. The step up loan repayment option starts off with a low EMI amount and slowly increases as you keep progressing in your career over the years. The advantage here is that even though you will start with a low EMI, you can show the bank or lender that you are a prompt EMI payer and that way build trust as the EMI increases over the years.
  • Step down repayment option – An opposite of the Step Up repayment option, this option is ideal for a salaried individual as he is nearing the end of his career or approaching retirement. A repayment option nonetheless, the EMI here reduces over the years as and when your professional career comes to an end. It is a customized option for professionals who expect their income to gradually decrease down the years.
  • Balloon repayment option – Like a balloon that swells, this repayment option allows you as a borrower to pay lower EMIs in the beginning years of your loan tenure. The difference to step up loans is that more than one third of the loan amount is paid during the last installments.


It is important that you take timely loan repayments seriously if you want to ensure a tension free loan repayment process.

35 thoughts on “3 Things To Know About Personal Loan Repayment

  1. Pingback:4 Things To Know About Secured And Unsecured Loans

  2. I have checked your website and i have found some duplicate content,
    that’s why you don’t rank high in google’s search results,
    but there is a tool that can help you to create 100% unique content, search for;
    Boorfe’s tips unlimited content

  3. Pingback:Misconceptions and Facts: Lies and Truth About the Business of Modeling

  4. Pingback:URL

  5. Making money online is getting harder and harder but with this little known trick you can start earning almost immediately. This actually works I have tried and tested the method myself and after 20 years as an internet marketer little golden nuggets like this are hard to find. Watch this short video to learn more and start earning today. http://bit.ly/-GoogleSniper

  6. whoah this blog is excellent i love reading your posts. Keep up the good work! You know, lots of people are looking around for this info, you can help them greatly.

  7. Thanks , I have recently been searching for info approximately this subject for a while and yours is the best I have came upon till now. However, what about the conclusion? Are you positive in regards to the supply?

  8. The root of your writing while appearing reasonable at first, did not settle properly with me after some time. Somewhere throughout the paragraphs you actually managed to make me a believer but just for a very short while. I however have a problem with your leaps in logic and you might do well to help fill in all those gaps. If you actually can accomplish that, I will undoubtedly end up being amazed.

  9. Undeniably believe that which you stated. Your favorite justification appeared to be on the internet the simplest thing to be aware of. I say to you, I certainly get irked while people consider worries that they just do not know about. You managed to hit the nail upon the top and also defined out the whole thing without having side effect , people can take a signal. Will likely be back to get more. Thanks

  10. Hi I have preclose my loan can you please write the procedure how to loan amount closer.
    My Name: Venkatesh
    Registered Mobile Number: 9087067532

    * You lose sleep at night care how to get a loan?
    *Are you looking for a personal loan?
    * Are you looking for a loan to start your own business?
    * Are you looking for loans to large projects?

    EMAIL US TODAY: oaktreecapita321@usa.com

  12. Thanks for your post. One other thing is that if you are disposing your property on your own, one of the issues you need to be alert to upfront is how to deal with house inspection records. As a FSBO vendor, the key about successfully shifting your property along with saving money with real estate agent revenue is awareness. The more you understand, the easier your property sales effort will likely be. One area where by this is particularly crucial is assessments.

  13. Once I initially commented I clicked the -Notify me when new feedback are added- checkbox and now each time a comment is added I get four emails with the identical comment. Is there any method you’ll be able to take away me from that service? Thanks!

  14. Nice post. I be taught something more difficult on different blogs everyday. It’ll all the time be stimulating to read content from other writers and observe a bit of something from their store. I’d favor to use some with the content material on my weblog whether or not you don’t mind. Natually I’ll offer you a hyperlink on your internet blog. Thanks for sharing.

  15. Usually I don’t learn article on blogs, but I would like to say that this write-up very pressured me to try and do it! Your writing style has been surprised me. Thank you, very great article.

  16. I carry on listening to the reports talk about receiving boundless online grant applications so I have been looking around for the best site to get one. Could you advise me please, where could i acquire some?

  17. Yet another thing to mention is that an online business administration diploma is designed for students to be able to smoothly proceed to bachelor’s degree education. The 90 credit certification meets the other bachelor college degree requirements and when you earn your current associate of arts in BA online, you should have access to the most up-to-date technologies in this particular field. Several reasons why students want to get their associate degree in business is because they are interested in this area and want to obtain the general knowledge necessary in advance of jumping in to a bachelor college diploma program. Thx for the tips you provide within your blog.

  18. I’m Tia Bond from USA. I was able to get a loan from this firm owned by Mr. Daniel Silva after i read some vital info about their loan programs online then i decided to contact them and i was funded $462,000 without much time wasted. Have you be declined for a loan from your bank or any other organization, then i will advise you to contact Mr Daniel email: ( danielsilva59491@gmail.com ) if you are in need of any kind of loans such as: personal loans, business loans, or our Phone Number: +1(516) 350-5832.

Leave a Reply

Your email address will not be published. Required fields are marked *