4 Best Practices to Manage Your Personal Loan

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4 Best Practices to Manage Your Personal Loan
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• Owing to the convenience factor of taking
  out a personal loan, it has become a sought-after
  mode of availing of emergency funds today.
  There's no restriction on how you can use the
  loan amount, and you needn't submit any
  collateral either. No wonder both self-employed
  individuals and salaried professionals prefer
  taking out a personal loan to meet financial
  emergencies. In fact, some financial institutions
  offer specific Personal loan for self-employed to
  cater to the needs of this particular segment.
  But you also need to remember that it's still
  debt at the end of the day. Debt, which you must
  clear on time. A personal loan is a means of
  lessening your financial burden if you default
  on its EMIs, it may end up increasing your
  financial woes. Here are four tips to manage your
  personal loan better

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1 . Plan Your Loan Repayments Early On

• Whether you plan to take a Personal loan for
  self-employed or a Personal loan for Salaried,
  you must plan your repayments early on before
  availing of the loan itself. Once youve
  established the need for a personal loan, you
  must check if you have the required repayment
  capacity or not. One way to find out is by using
  a Personal Loan EMI Calculator tool. Almost all
  the major banks and financial institutions have
  this tool on their web site. All you need to do
  is input your loan amount, interest rate, and
  loan tenure. Youll instantly know your monthly
  loan EMI, followed by the total payment youll be
  making. This is further broken down into the
  principal interest amount. Proceed with your
  loan application only if you can pay your EMIs in
  full every month.

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2. Make Your Monthly Loan EMIs a Priority

• Until your Personal loan for self-employed
  is fully paid off, you need to make the EMIs on
  the loan your first priority. You already know
  the devastating effect defaulting on your EMIs
  will have on your credit score. It will be
  recorded on your credit report for an extended
  period of time. So, you need to do all you can to
  ensure timely repayment. In fact, its a good
  idea to adjust your other financial expenses
  around your loan EMI payment. For example, if you
  see that purchasing a new smartphone for yourself
  will come in the way of timely EMI repayment,
  its better to postpone this purchase.

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3. Cut Down on Unnecessary Expenditure

• For the duration of your loan, cutting down
  on unnecessary and wasteful expenditure is a good
  idea, as it can free up money you can use towards
  your loan. If you choose to do so, itll help you
  clear your loan a little earlier than planned
  (which is always good). ). If not that, you can
  save this extra money elsewhere. Remember you
  need to pay your Personal loan for self-employed
  EMIs on time. Defaulting on them is not an
  option, even if you want to buy a new electronic
  gadget. So, based on whether its a need or a
  want, cut down on things you dont require.

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4. Stay Within Your Monthly Budget

• After availing of a Personal loan for
  self-employed, you need to revise your monthly
  budget to accommodate its EMIs. Once done, ensure
  that you always stay within the budget. Or else,
  you risk defaulting on your personal loan EMIs,
  and you dont want that!

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Wrap Up

• If youre worried about not being able to
  make timely repayments for your personal loan,
  dont fret. Youll be okay as long as you follow
  the points mentioned above. The key is to treat
  your EMI payments seriously and clear it at the
  earliest.

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