Financial emergencies often strike without warning.
While many financial instruments help you access instant funds for such unplanned events, the best one is undoubtedly personal finance. After all, they are available at affordable interest rates and disbursed quickly!
Nevertheless, you must know how to use these loans to get the most out of them. Here’s how you can best manage unplanned expenses with personal loan.
Go for a pre-approved loan
Getting a personal loan in emergenciesis a wise decision because they have quicker turnaround times. But you can reduce the loan approval time further by opting for a pre-approved loan.
Most lenders offer pre-approved loans to potential borrowers who have a clean track record and are deemed creditworthy. So, if you apply for a pre-approved loan, you can skip the initial stages of the application process and reduce the loan processing time.
Additional Read: Why Should your Opt for a Personal Loan this Festive season?
Opt for a suitable repayment tenure
The last thing you want to do is get a loan to cover emergency expenses and not be able to repay it. So, pay attention to the loan tenure when opting for the loan.
When deciding on a loan tenure, make sure the EMI amount payable matches your current loan repayment ability. This ensures you can repay the loan comfortably without stressing out your finances in the process.
Select a flexi-EMI plan
If you have taken a personal loan and are still at the beginning stages of your career, ask your lender if they offer a flexi-EMI loan plan. Why? Because under this plan, you can pay lower EMIs at the beginning of the tenure and gradually pay more as your salary increases. This helps you pay your EMIs as your finances permit, thereby reducing the strain on your finances.
Negotiate with your lender for a lower interest rate
Getting a loan to take care of an unexpected event may mean going into debt for a short while. But that doesn’t mean you have to spend high amounts on loan interest. If you have a good credit score (preferably over 750 points), you can negotiate with your lender for a lower personal loan interest rate. The best part? Given your high credibility, most lenders will oblige you request willingly.
Some financial emergencies may require more money than expected. But thanks to the loan overdraft facility, you don’t need to worry about it. With the OD facility, you can withdraw funds from a pre-specified amount as per your requirements and repay the borrowed amount at your convenience. In fact, since the interest is only charged on the amount borrowed, you save money on the total interest spent as well.
Additional Read: How to apply for a personal loan in 5 simple steps?
If you’re on the lookout for a trusted financier, Tata Capital is right here to help you out. We offer loans at affordable interest rates and minimal paperwork. Just fulfil our basic personal loan eligibility requirements and get the required funds in a couple of business days.