Your loan repayment period is inversely proportional to the EMI quantity of your finance. Choosing longer repayment tenures permits you to disburese the overall due quantity over a longer time period, thus lowering the EMI amount. However, it is necessary to understand that while your longer loan period comes with economical, small amount EMIs, it also raises the interest rate payable on the financing. You must only select longer payment periods if you think you can’t afford Higher EMIs.
Choose to pay higher down payment amount
Deposit describes the quantity paid by the customer while buying a thing on loan. The majority of bank normally provides 85%-90% of the real cost of the item taken on loan, whereas the consumer must birth the staying 10%-15% and also pay it as down payment. However, your can choose to pay a higher deposit quatity, and also reduce the overall sum taken as loan. Keep in mind that you only need to pay rate of interest on the primary quantity you borrow. A higher loan amount can cause you needing to pay a higher rate of interest and also higher EMIs. Paying a huge down payment can help reduce the EMIs and decrease the rate of interest also.
Opt for lower rate of interest
The interest rate is just one of the most vital factors that affect the principal loan paid out and also the period of the loan. When you choose a lower rate of interest, you are also choosing a shorter tenure. If you think that you can settle the lending much faster, by paying off high EMIs, after that you can go with a reduced tenured loan. A Loan tackled a lower rate of interest helps you pay off your debt much faster.
Go with Balance Transfer
If you have a high cost loan, you can select refinancing by taken out a lower price financing. This called as Balance Transfer Loan, which usually includes a reduced interest rate. You could also take out a top up loan on your higher amount loan.
Consider your existing bank while take a loan
Borrowing from a bank with which you have an existing relationship, can operate in your favour as you might hae the ability to bargain the regards to the finance. If you have an excellent working relationship with your bank, you may have the ability to procure lower rates of interest on your loan amount.
An experienced, qualified and result oriented professional with several years experience as a Chartered Accountant. Hemant assignment in various industries have helped him to develop expertise in sales, customer relation management, and Enterprenurship. Hemant has got degree in B. Com ( Hons. ) from Delhi University and is a Chartered Accountant by profession.Specialties: Accountancy, Taxation, Corporate Law, Business Audit, Entrepreneurship.