The entire gamut surrounding personal loan application’s submission involves a lot of decision making and steps. From qualifying for the varying eligibility criteria of different lenders, zeroing in on the right lender, to finally getting the Tata capital personal loan application accepted and sanctioned, there are numerous vital steps involved in this process. And once the loan gets sanctioned, it’s expected and also natural that borrowers get to breathe a sigh of relief and then begin their EMI repayments from next month.
But above all, it’s important to smartly handle the Tata capital personal loan EMI repayment to ensure you do not end up adversely impacting your financial future in any way. And to assist you towards this task, here are 5 smart tips for managing your personal loan instant cash advance.
Avoid any miss or delay in EMI repayments
During the tenure of servicing your Yes bank personal loan, always focus on developing the habit of ensuring timely repayment of EMIs on a regular basis. As disciplined and regular repayments of your EMIs and credit card bills reflect positively in your credit report, this contributes to building and maintaining a good credit score. Possessing a high credit score of around 750 and above is what can enable the borrowers do not only to have higher loan eligibility and approval chances but also fetch them lower interest rates on Tata capital personal loans, besides getting better service terms. On the contrary, any irregularities in loan repayment can pull down the credit score, hence pulling down chances of approval and eligibility of loan in future too.
Make prepayment whenever you have surplus money
Another aspect to be kept in mind by loan borrowers is to make prepayment or foreclosure of outstanding loans whenever they have surplus funds. Doing so can lead to significant savings in interest cost, especially if done during the initial years of the loan tenure. Therefore, when repaying your loan(s), always aim towards making loan prepayments whenever you have surplus funds. In case you are serving multiple loan repayments, always start with the prepayment of a loan charging the highest interest rate.
However, ensure to factor in the applicable prepayment charges (if any) before making a prepayment. Go through the prepayment conditions and fees, if any, of Yes bank personal loan before moving forward. Although the RBI debars lenders from levying any prepayment charges on floating rate loans, some lenders may levy prepayment charges on fixed-rate loans. So, go ahead with the decision of prepayment only if the savings in the overall interest cost significantly exceed such charges if any.
Also, during the effort to make prepayments, personal loan borrowers should avoid prepaying or foreclosing their personal loan by utilizing neither their emergency fund nor the specific investments attached to important financial goals of life. This is because doing so can force you to avail relatively higher cost loans in order to deal with life’s financial emergencies or to achieve those vital financial goals later on. Moreover, when choosing amongst the asset classes of your existing investments (not earmarked for any crucial life goal) to be redeemed for making the prepayment, the first go-ahead is to redeem the surpluses parked in fixed income instruments like fixed deposits, debt funds, etc. More often than not, the returns generated by these fixed income products are generally lower than the interest rates charged on most credit options.
Go ahead with balance transfer whenever it’s feasible
Going for the balance transfer option is a move that allows personal loan borrowers to transfer their existing loan to another lender at a lower interest rate subject to the varying criterion amongst lenders like the eligibility criterion for Yes bank personal loan when compared to other lenders. This assists in lowering their overall interest cost as well as EMI burden. Hence, existing loan borrowers having significant residual loan tenure should periodically compare the interest rates charged on their existing loan vis-a-vis those offered by other lenders. And With Tata capital personal loan offering one of the lowest rates, make sure to compare the rates of other banks and NBFCs with it to strike the right deal with the most suitable lender for your financial requirements.
Also, in case the interest rates offered by other lenders are lower and can lead to significant savings in your existing overall interest cost of Yes Bank personal loan, then first enquire with your existing lender for reducing your loan’s interest rate. If the lender refuses to give you a lower rate on the existing loan, then take it as a green signal to move ahead with opting for a balance transfer to switch to the lender offering a lower interest rate. However, before jumping to balance transfer, keep in mind to always take into consideration the applicable prepayment charges, if any, to be levied by the existing lender, and processing fee etc., possibly levied by the new lender. Move forward with the balance transfer option of personal loan only if the overall savings in interest cost significantly outweigh the associated costs.
Ensure to review your credit report and score from time to time
Your credit report aptly summarizes the detailed list of your various loan & credit card-related activities, as reported by the banks and lenders and credit card issuers. Then, credit bureaus go ahead to calculate your credit score based on all this listed information. Hence, it is imperative that the presence of any error on the part of the lender or bureau or even a fraudulent activity in your credit accounts can adversely impact your credit score and pull it down. So, the only and probably the best way to mitigate this risk is by periodically fetching your credit report from time to time, ideally once every 2-3 months.
Remember, you can fetch one free credit report from each of the credit bureaus once a year, so make sure to spread the requests in such a way that you are able to avail of one free report in every quarter of the year. Moreover, keep in mind that even when evaluating your credit eligibility for Tata capital personal loan, the lender would fetch your credit report from the bureau to check your creditworthiness and past repayment history in order to assess the credit risk involved in lending to you.
Include personal loan EMIs in the emergency fund
Everyone knows that the primary purpose behind the creation of an adequate emergency fund is to deal with unforeseen financial exigencies or income disruptions such as sudden job loss, severe illness, disability or other adverse events in life. The size of an adequate emergency fund should ideally be equal to at least six months’ unavoidable monthly expenses, such as rent, insurance premiums, EMIs etc. Hence, it becomes imperative for those repaying the existing loan(s), especially the relatively high-cost ones like Yes bank personal loan and other lenders offering this relatively expensive credit option, to include the EMIs equivalent to at least six months in their emergency fund. This enables borrowers to continue repayment of their EMIs even during exigencies, too, hence saving themselves from incurring late payment penalties, increased interest cost and adverse impact on credit score due to irregularities in loan repayment.
