Tips to Manage Your Finances After Taking A Personal Loan
A Personal Loan is a useful financial product. It can bail you out of many challenging situations. People take Personal Loans to pay for medical emergencies or to fund weddings. Such loans help you pay for sudden and unexpected expenses. But a Personal Loan is expensive and charges a high rate of interest. Say, you take a Personal Loan to pay for an unavoidable expense. Then you must make every effort to prioritise the Personal Loan repayment process. Do you need help managing your finances after taking a Personal Loan? Here are some quick tips.
Managing your Finances after Getting a Personal Loan
You need to manage your finances well after taking a Personal Loan. Here is how you can do this:
- Prepare a budget: First, prepare a budget and stick to it. You must have taken the loan to meet a specific financial need. Say, you took the loan for a medical expense. You need to go to Singapore to consult a skin doctor about a rare rash that you have developed. So, set aside funds for your air tickets and your hotel stay. Estimate your food and conveyance costs while in Singapore. Then allocate a large chunk of the loan amount towards the actual medical costs. You would have to pay the hospital’s registration fee and the doctor’s consultation fee. You would also have to factor in medical tests and medicines. This is an important step. Otherwise, you might use your loan on other things, like sightseeing and shopping. Avoid this at all costs.
- Decrease your expenses: Once you have a Personal Loan to pay, your monthly expenses will increase. You have to budget for the EMIs. So, reduce your other expenses as much as possible. Is there a holiday that you can postpone or an expensive gadget that you can do without? Then avoid those expenses. Save as much as you can. This way, you will not strain your finances. Your financial condition will remain stable even after you pay the EMIs.
- Create a repayment plan: Make sure to put together a good repayment plan. Choose an EMI scheme that is practical and affordable. Many people choose high EMIs in an attempt to close the loan quickly. Doing this is dangerous. It pushes up the cost of the EMIs. It also leads you to a position where you cannot manage your finances. It may take you a long time to repay your loan in small instalments. But at least you will manage to pay it back diligently.
- Personal Loan transfer: You can transfer Personal Loans from one lender to another. Consider changing your loan provider if the new lender offers a better rate of interest. But take into account the costs and fees of transferring the loan. Make sure that the difference in the interest rates makes up for the cost and hassle of a transfer.
The bottom line
You can manage your finances well even with a Personal Loan to pay. All you have to do is become disciplined with your expenses. Check out Personal Loans from Bajaj Finserv and see how you can reach your financial goals.