Personal loan is a multi-purpose financial instrument that helps you to meet your various monetary needs and life goals. Be it home renovation, child’s higher education, international trip, emergency medical expenses, a personal loan can be the right choice to fulfill your several financial requirements.
The majority of the banks and financial institutions offer several types of loans such as personal loan in UAE without a salary transfer or personal loan with salary transfer for expats as well as UAE Nationals in a matter of hours.
What makes this financial instrument the most feasible option is flexibility. Yes, you read it right. The borrower has complete control in repaying the loan amount as per his/her convenience. As a consumer finance borrower, you can enjoy the flexibility to select the tenor period as well as the loan amount. According to both of these things, you can adjust your Equated Monthly Installments (EMIs) either manually or by using a personal loan calculator.
So, if you want to opt for a high finance amount but keep your monthly installments as low as possible then consider these below-mentioned handy tips.
Choose a Long Repayment Tenor
The loan tenor is the total duration of the repayment where the borrower has to repay the principal as well as interest rate to the provider. It is inversely proportional to the monthly installment amount of your consumer finance. Choosing the long repayment tenor enables you to repay the total due amount over a longer period of time, thereby minimizing the amount of the EMI.
However, you also need to keep one thing in mind that while your longer repayment tenor comes with easy to pay, small amount monthly installments, it also increase the interest rate payable on consumer finance. So, you should only go ahead with this option if you think you can’t afford a high amount of equated monthly installments.
Opt for a Low Personal Loan Interest Rate
Personal Loan interest rate is one of the key factors that significantly affect the principal loan disbursed as well as repayment tenure of the finance. When you are opting for a personal loan at a low rate of interest, you’re also choosing a short repayment tenor. So, if you think that you can make the repayment of the loan faster by paying off a higher amount EMIs then only you should choose lower tenured finance. However, consumer finance taken on a low rate of interest enables you to pay off your debt much faster.
Opt for Balance Transfer
If you have a high rate loan, then you can also go for a refinancing option by opting for a low cost loan. Well, this is typically known as a balance transfer finance which generally comes with a low interest rate. Other than that, you could also opt for top-up finance on your high amount of finance.
Choose Your Exciting Bank While Opting for a Loan
It is highly recommended that borrow a loan from a bank with which you have an existing relationship. It will be work in your favor if you have maintained a good relationship. With this, you will be able to negotiate the loan terms. Also, if you have maintained a financially responsible behavior and a good relationship with the bank, then the chances are high that you will be able to opt for a loan at a low rate of interest.
Select the Best Option Available
In recent times, innumerable banks and financial institutions are offering unsecured personal loan options such as personal loan in UAE without a salary transfer or personal loan with salary transfer for expats as well as UAE Nationals. With increasing competition, some of the providers offer a low rate of interest as well as other unique features to influence its customers.
So, when you decide to opt for consumer finance, don’t forget to compare all the available options in the market before zeroing down. Now these days, it has been quite easier to make a comparison; all credit goes to the Internet. You can compare different lenders based on their rate of interest, repayment tenor, loan amount, and other charges within a very short span of time only to find out the best option for you.
The Final Verdict
Following the aforementioned tips can certainly help you to make smarter decisions when opting for consumer finance. By making smart financial decisions, you will be able to opt for a high loan amount and also pay a lower amount of EMIs.
But remember; when you opt for a high loan amount which is more than you actually required, it might burn a hole in your pocket since you would unnecessarily end up paying more monthly installments every month. That is why, it is very important to choose the finance amount smartly and wisely, choose the best lender, avail at a low rate of interest and make sure you know what you are signing up for. By keeping your monthly installments as minimum as possible, you can avoid this financial instrument from becoming a liability. Also, it helps you to maintain a good credit score which is like the icing on the cake.
Pardeep Garg is online entrepreneur, motivational speaker, and author. He is passionate about market research and loves to write on topics Market Research, Business, digital marketing, Finance, Information and opinions to success in life.