Whether it is a vacation, a big-ticket purchase, or an emergency, a personal loan serves as a quick and easy solution for financing. You can seamlessly bridge the financial gap with this credit option.

While it is convenient, your experience also hinges on how you manage the repayments. You want to plan for them before you apply to avoid financial strain later. Lenders like IDFC FIRST Bank offer options like the FIRSTmoney personal loan that let you choose a flexible tenure of 9 to 60 months. Read ahead to learn how to manage quick repayments without increasing the EMI.

Ways to manage loan repayments

  • Shorten the tenure

This is an indirect way to control the EMI, as per your comfort. Once you’ve got the instant personal loan offer approved, opt for tenure reduction whenever the option presents itself. With a shorter tenure, you have fewer months of interest accumulation to worry about. It also directly lowers the loan cost with limited interest outgo.

  • Budget before applying

Budgeting is of utmost importance while getting a loan. It determines how smooth the repayment journey gets. You want to evaluate your monthly income, fixed expenses, need for savings and emergency funds in advance. Use an EMI calculator for further clarity and stay consistent with the EMIs and clear the loan faster without financial stress.

When opting for a personal loan, consider FIRSTmoney by IDFC FIRST Bank for a 100% digital process, zero foreclosure charges, instant disbursal and low interest rate starting at just 9.99% p.a.

  • Use additional income

Throughout the course of employment or business, you may receive variable income. Examples include bonus, incentives, additional project earnings, etc. Use them to gather funds for early repayment. When you have enough, you can foreclose the loan. Lenders like FIRSTmoney personal loans by IDFC FIRST Bank offer the foreclosure option with zero foreclosure charges.

  • Redirect savings from reduced expenses

Besides additional income, you may have the opportunity to save funds by cutting down certain expenses. For instance, you can save on commute charges, cancelled subscriptions, better budgeting on household expenses, savings on bills, etc. You can redirect these savings toward personal loan repayment.

  • Avoid penalty charges

Most charges on a personal loan are avoidable. When you clear your EMIs on time and plan your repayment in advance with an EMI calculator, you can avoid late payment fees, EMI bounce charges, etc. Make sure you track the due dates, set EMI mandates, and maintain sufficient balance in your account to never miss or delay an EMI.

  • Keep additional borrowings on hold

Unless absolutely required, try to maintain a low credit utilisation. When you have applied for an instant personal loan, avoid taking up new loans or increasing your credit card limit. This will stretch your monthly budget and make it harder to manage repayments. It is better to keep your finances focused to clear the personal loan faster.

  • Consider refinancing

If the high interest rate on your current loan is acting as a hindrance to faster loan clearance, you can always look for better offers while working on fixing your credit score.

  • Maintain an emergency fund

Your current finances can take a hit in the event of untoward circumstances. This compromises your EMIs along with other expenses. You need an emergency fund, which acts as a safety net against such situations. It provides you with a buffer to continue your EMI payments smoothly. This helps clear your personal loan faster without the hiccups.

  • Review your loan statement periodically

With your loan statement, you can check the split between the outstanding principal and interest portion. With such visibility, you can readjust your strategies to save up for prepayment. You can also get a snapshot of this breakup before you apply with an amortisation table before you apply for the loan.

Final words

Clearing a personal loan faster is simpler than you’d imagine. You only need to strategically plan the repayments even before you apply. Budget to accommodate EMIs into your monthly budget without straining your finances. Also, throughout the course of the loan, try to avoid penalties, plan a buffer, shorten the tenure, use additional income for prepayment, etc., to support your vision of repaying faster. All these efforts culminate in a smoother borrowing experience.