Tips to reduce your personal loan EMIs - Bajaj Finance Limited (2024)

FAQs

Tips to reduce your personal loan EMIs - Bajaj Finance Limited? ›

Part-prepay your personal loan:

When the outstanding principal amount reduces, the interest amount also decreases, leading to a reduced EMI. You can use funds from your annual bonus or variable pay to pay off a significant chunk of your loan. Opting for a part-prepayment reduces your EMIs along with the loan tenure and makes you debt-free sooner.

By extending your repayment period, you could lower your monthly instalments, giving you some breathing space to meet your financial obligations. This option is available on home loans, vehicle finance and personal loans.

One smart way to do is to make regular partial-prepayments. Prepaying your principal reduces the interest charged on the loan.

You can lower a monthly personal loan payment if you qualify for a lower interest rate or you choose a longer repayment term. However, choosing a longer repayment term without a lower interest rate can cost you significantly more interest over time.

If you have extra cash and you want to reduce your EMIs, you can choose a part-prepayment facility and pay off your debts earlier than expected. Depending on the borrower's decision, this can result in either lowering of your EMIs or shortening repayment tenure.

First, you can contact your loan provider and ask whether you can bring down the payments. Lenders may be able to provide support, such as a payment holiday or a period of reduced payments or reduced interest, or a repayment plan.

For a personal loan, you can bargain for a lower interest rate. Even though not all lenders are amenable to negotiations, it's still worthwhile to check into it, particularly if you have a solid credit history and a history of making your loan payments on time.

You can't have a defaulted loan forgiven, but defaulted loans may qualify for discharge, depending on the loan and the program.

After you fail to make a few payments, your loan will be considered in default, which essentially means that you've failed to follow through on the terms of your loan agreement. Once you're in default, you can be contacted by debt collectors and even be asked to appear in court.

What are the weaknesses of Bajaj Finance? ›

You can cancel your loan within seven business days from the disbursem*nt date for the purchase. This is applicable to both Bajaj Mall purchases and offline purchases at our partner store. However, for purchases made on e-commerce sites, you need to raise the cancellation request with the respective site.

For example, you have applied for a Bajaj Finserv Personal Loan of Rs. 1 lakh at an interest rate of 14% p.a. for a tenure of 2 years. Your EMI will be 4801. Check your EMI easily using our online EMI calculator for different amounts of personal loans.

An excellent credit score, consistent income and low debt-to-income ratio are key to securing a low-interest personal loan. But if your finances aren't in the best shape, consider taking a step back to improve your credit score and lower your utilization rate before applying.

That's why getting a lower interest rate or extending the term of your loan may help lower your monthly payments. Be sure to keep an eye on the total fees and costs of borrowing because extending the term or refinancing your loan could increase monthly interest payments and the overall expense you pay over time.

Extend the repayment term of the loan

You will pay less on your personal loan if you obtain a lower interest rate after refinancing. By refinancing to a longer term, you will pay a lower minimum monthly loan payment. Due to interest charges, you will likely pay more toward the loan overall.

5. Request the lender for an EMI-free period. In exceptional cases, such as a business halt or job loss, your lender may allow you to Stop paying your EMI for three to six months at their discretion. After this period, you will need to resume your regular EMI payment as perschedule.

If you have personal loan debt and are in a financial position to pay it off early, doing so could save you money on interest and boost your credit score. That said, you should only pay off a loan early if you can do so without tilting your budget, and if your lender doesn't charge a prepayment penalty.

Refinancing a personal loan involves taking out a new personal loan and using the funds to pay off your old loan. Ideally, your new loan will have a lower interest rate or new terms that better suit your needs. Once you've received the funds for your new loan, you'll be expected to start making payments on it.