Personal Loan: hdfc bank told great tricks to reduce the EMI of personal loan

Personal Loan: If you have taken a personal loan or are thinking of taking one, then here we are telling you some ways with the help of which you can eliminate your loan.

Personal loans are a good way to take a loan from the bank without pledging anything at the time of need. Personal Loan EMI can be availed for both salaried individuals and self-employed borrowers. This loan can be easily availed from banks, NBFCs, and other financial institutions. A personal loan can be availed for any reason be it a family emergency or studies. However, its interest rate is also higher as compared to other types of loans. So we all need to save money in some way or another other and it is natural to wonder how to reduce EMI as it is high in personal loans.

Here are some smart ways to reduce your EMI burden on Personal Loans by hdfc Bank:

Choose a step-down EMI plan

Many banking and non-banking institutions offer a step-down EMI plan, where the borrower takes a personal loan and pays a larger portion of the borrowed money along with interest in the initial years. The EMI reduces over time as the principal amount reduces monthly. This is a better option for those who have come close to retirement.

Make partial prepayment

One can choose to make a partial prepayment to reduce the EMI burden. Most lenders offer an option to partially prepay a part of your loan after you have made several EMI payments. The way it works is that you pay a lump sum which is deducted from your outstanding principal amount. When the low-interest rate becomes less than the principal amount, the EMI will reduce. You can pay a fixed portion of your loan amount from your annual bonus or variable pay.

You can also avail of a lower interest rate and extended loan repayment tenure which collectively lowers your EMIs. If you decide to use this option, keep in mind that apart from the lower interest rate of the new lender, you should also factor in the cost of loan processing fees and loan foreclosure fees.

Avail of personal loan top-up at affordable interest rates

 If you have been paying your loan EMIs on time, you can approach your lender for a top-up loan on the existing personal loan. If you make timely payments, you can negotiate for a loan top-up at a lower interest rate.