Guidelines for Repaying Your Quick Personal Loan -Unity Bank
5 min read | 12 months ago
Quick personal loans are lifesavers for most people, helping them take care of sudden expenses without hassles. Gone are those days of lengthy loan application procedures and documentation before obtaining the funds you need. You can now easily apply online for a quick personal loan and get it disbursed almost instantly if you meet the lending criteria. It helps you cover urgent financial needs while repaying the loan conveniently over a longer duration. However, note that following a proper repayment strategy is crucial. Aim to clear your quick personal loan as early as possible without any defaults or piled-up debt. Here are some tips to help you achieve this goal.
Make Timely Payments to Avoid Penalties
Pay EMIs for online loans on time to avoid defaults and subsequent late fees or penalties. Do not delay even a single EMI payment on your quick personal loan. It will help you maintain your credit score (this will help you get loans more smoothly in the future) and avoid costly penalties/charges for missing EMI payments. If there is a situation where you cannot pay the personal loan EMI within the due date, reach out to your bank immediately and ask for an extension.
Set Up Automatic Payments for Convenience
You can easily set up automatic payments for quick personal loans. Setting this up at the start of your loan tenure helps you avoid defaults. The lender will automatically debit the EMI from your bank account on the due date each month. It will help you bypass penalties and late fees. Just remember to maintain suitable funds in your account for the EMI payment.
Prioritize Loan Payments in Your Budget
Loan payments should be your priority above everything else. Before you apply for a quick online loan, be sure about your repayment capacity. Note your monthly costs and payments. Select a loan date that allows you to clear your EMI before you take care of other fixed costs. One good way to do this is to keep your EMI date close to your salary date. Otherwise, you can build a reserve fund for at least 3-6 EMIs. It will ensure unhindered loan repayment even in tough times.
Consider Making Extra Payments to Reduce Interest Burden
Make part-prepayments whenever you can. It will help you lower the overall interest outgo on the loan. If you get a bonus or an increment, use it for a part payment. It will lower the principal amount and reduce the interest amount and tenure. Note the foreclosure and prepayment charges (if any) levied by your bank or financial institution. These online loans come without any collateral or security requirements. Hence, their interest rates are often higher than secured options like home or car loans. Thus, periodic prepayments will help you slash the interest burden and manage your finances better.
Conclusion
Promptly repaying your loan is always the need of the hour. Of course, personal loans are hugely popular in India. A report by BankBazaar highlights this fact, noting around Rs. 45.51 lakh crore worth of outstanding loans in this category as of October last year. It is a testament to the vital role played by personal loans in helping people overcome financial emergencies and take care of other pressing needs. However, while taking a personal loan to meet your obligations is okay, have a proper repayment strategy from the beginning.
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About Unity Small Finance Bank
Unity Small Finance Bank is committed to making banking simpler and more accessible for everyone. Our services include Savings Account, NRI account, Current Account, Fixed Deposits, and Personal Loans offering flexible tenures and attractive interest rates. We also offer financing options like MSME Loans and Microfinance to support businesses and underserved communities. Learn more about Unity Small Finance Bank here.
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