How To Lower Your Present EMI
March 12, 2024

“Here’s How You Can Reduce Your Current EMI.”

Life can be unpredictable; unexpected expenses can throw off even the most careful budgeting. Sudden expenses can leave you needing extra cash, whether it’s a surprise medical bill, a home repair, or education costs. And if you are already paying off a loan, the hefty EMIs can strain your finances. In both situations, finding ways to reduce the burden of your current EMI becomes a top priority. Whether you already have a loan or are considering taking one out, finding ways to lower your EMI can bring much-needed relief and financial flexibility.

This guide will explore effective tactics and alternatives to Reduce Your Bank Loan EMI, whether you’re repaying a loan or considering a new one. Implementing these tactics can improve financial management. Techniques to Reduce EMI:

Let us start by looking at Ravi’s case. Having taken a Personal Loan from Axis Bank, he now feels burdened by the EMI payments. Thus, he seeks to reduce the EMI amount and explores the following methods to achieve this goal.

Partial Repayment of the Loan.

If you have an existing Personal Loan and are struggling with the EMIs, you may want to consider the option of part prepayment. Many lenders offer this facility once a certain number of EMIs, usually 12, have been paid. Prepayment involves paying a substantial sum from the outstanding principal amount. For instance, leading banks such as HDFC Bank allow borrowers to prepay up to 25% of the loan amount in a calendar year.

By doing so, the outstanding principal amount gets reduced, along with the accrued interest, resulting in lower EMIs. You can use funds from your annual bonuses or variable pay to significantly dent your loan balances. Opting for part prepayment lowers your EMIs and reduces the loan tenure, helping you become debt-free faster. This is a strategic approach to managing your loan and lightening your financial burden.

Consider a Personal Loan Balance Transfer

Opting for a Balance Transfer of your loan entails transferring the outstanding amount of your current Personal Loan from one bank to another. The primary motive for this transition is to take advantage of a lower interest rate offered by the new Bank on the remaining loan amount. By leveraging this facility, you can reduce your debt burden and save on interest payments. HDFC Bank offers to take the principal balance of multiple loans under a single umbrella the customer can pay a single EMI at a reduced interest rate.

Take into consideration the variance in interest rates and any extra fees linked to the transfer to confirm that this alternative aligns with your financial aims and objectives.

Apply Personal Loan Top-Up

If you are already repaying a personal loan and have been diligent with your EMIs, you may qualify for a beneficial option a Top-Up Loan. This is one of the best ways to reduce your loan EMI. This additional loan allows you to access more funds while potentially benefiting from lower interest rates. Furthermore, opting for a Top-Up Loan may also offer the advantage of extended repayment tenure. This extension could lead to lower EMIs, sometimes providing increased financial flexibility.

Now, let’s consider the situation of Ramesh, who requires a Personal Loan, but his priority is low EMI. Consequently, he approached his bank to discuss this requirement. The bank presented him with several options to consider. Here are a few of them:

Opting for a Higher Down Payment with a mortgage

If you are hassled with numerous EMI and credit card bills but require additional funds, applying for a mortgage is a good option. With a Loan Against Property or a Home Loan, the interest rate applied is the most reasonable and large loan amounts can be appended to settle other dues. If you already have a mortgage, apply for a top-up to repay minor loans.

The interest rate for a secure loan is lower than unsecured credit, and the EMI can easily fit the budget with an extended tenure of 240 months. Pre-closure and partial payment are allowed without any restrictions and charges. The downside is that the interest is charged at an annual rate, so the total costs of a mortgage over the years are more than an unsecured Personal Loan.

A Loan with An Extended Repayment Period

Opting for a longer repayment tenure for a loan can significantly impact your monthly instalments. With a longer loan term, the total amount due is spread out over a more extended period, resulting in lower monthly payments. You can analyse and understand this by using an Online Loan EMI Calculator. This facility can benefit borrowers who require more flexibility in their budget.

In Conclusion

An EMI is a mandatory part of the monthly budget, and enough funds should be maintained in the account to clear the same. Delayed payment of the EMI is not an option it will lead to further debt issues and downgrade your CIBIL Score.

Getting credit is easy, but do not overextend yourself the repayment is a responsibility and should not strain finances.

If you need further advice, Contact to help you confidently work towards your financial goals.

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