Tips for Managing Loan EMIs With Variable Income

Managing or repayment of EMI seems a very tough task for every person having a loan in hand. If you want to become an expert on loans, then you should know effective EMI management to manage things better. EMI or “Equated monthly instalments” is the fixed amount that a borrower needs to pay on a monthly basis failing which penalties are levied by the concerned lender or authority. EMI is paid till you haven’t paid all the loan amount with interest. EMI consists of two different aspects: the principal amount and the interest. On one hand, where Principal amount is the loan amount you have borrowed from your bank. The other one is EMI which is fixed and contains some interests. The rate of interest on your loan is a type of tax for borrowing your specific loan from your lender. Whether you have an SBI personal loan or a secured one from another lender, you should know how to handle your finances and pay EMI on time.

EMI is based on several separate factors: the amount of the loan, the rate of interest and the type of the loan you have borrowed.

Good EMI management helps you save ample money and your savings. It boosts your CIBIL or credit score and avoids missed repayment of debts. Sometimes, managing EMI becomes very hectic especially if you are dealing with more than two loans at one time.

Here, in this blog, we will discuss on the top tips to manage your EMI very effectively. Know the tips here:

Tips to Manage Your EMI Effectively

Select the Right EMI Plan with a Better Loan

 You should explore the internet for a reliable and affordable option before making an application for your loan. You should check the rate of interest and the EMI value lenders demand. You need to check various things like the interest on the loan, tenure for loan repayment, the total amount of EMI, your income, and financial goals. If you have a stable income and want to get rid of financial burdens, then you can easily choose a higher EMI amount. If you have a variable income, then you need to make strategies that help you make the right decision in taking a good loan and EMI.

Work on Budget Management and Track All Your Expenses

If you want to manage your EMI, then you should know your income and the expenses you make every month on your body and your family. You need to make strategic planning with available funds in hand to ease the EMI repayment process. You should track all your expenses by checking and analysing your salary. You can fix a particular date to review your budget periodically or on a fixed date. It will help you manage funds for emergency situations and to allocate enough funds for advance payments. In this way, you can easily analyse your requirements with all the expenses you make.

Make Timely Debt Repayment Your Habit

Want to manage your loans effectively? It’s a good idea to prioritize your debt or EMI repayment. You can make your habit of regular repayment of all your loans. You can also opt to pay off your loan amount with the greatest interest rate at the initial stage which will help you manage things better for meeting long-term investment goals. Prioritising your debt repayment and making a habit of regular EMI submission will ease your financial burden very easily. You can choose short or longer loan tenure at your convenience.

Consolidating or Refinancing Your Loans

If you are running out of enough funds to pay timely debts for all your loans, it’s time to switch to a financial option. Consolidating your debts will help to ease your financial stress as with this option, you have to pay a single debt rather than submitting each one step by step. If you have taken an SBI personal loan with other loans, try consolidating it into a single loan. It will ease the procedure of loan repayment. In case you find a better opportunity for refinancing your loans, choose and apply for the same.

Conclusion

There are many ways to manage your debt or EMI repayment on a timely basis. You need to access your income and budget and then work on money management. You can choose a refinancing option, prepayment option, budget management etc.