EMI Tips: Personal loan EMIs eat up your salary? So get rid of them with these 5 smart ways..

Loans are taken from the bank for everything from buying a house to studying. But a significant part of a person's income is spent on repaying the loan through EMI. Yes, every month the salary comes into the account, and the next moment the message of EMI robs your pocket? This happens more with those who take personal loans. But now if you too are trapped in this maze of personal loan and every month's installment seems like a burden to you, then take a sigh of relief.

Yes, we have brought for you 5 such surefire and amazing methods, by following which you can not only reduce your EMI, but also bring your financial life back on track. So why delay? Let's know those 5 smart moves that can change your life.

1. Lump sum payment
If you got a bonus from your office on a special occasion or suddenly got money from somewhere, then instead of spending it on wasteful expenditure, show smartness and deposit a lump sum in your loan. This is called 'part-prepayment'. By doing this, your principal amount will be reduced immediately. That is, if the principal amount of the loan decreases, then the interest charged on it will also decrease, and your EMI will automatically decrease. This is a great way to reduce EMI.

2. Loan transfer

Is your bank charging you more interest? There are many banks and financial institutions in the market that are offering personal loans at low interest rates. Just like you change the mobile company for a better plan, the loan can be transferred to another bank. This process is called 'balance transfer'. This can reduce your interest rate as well as result in a big reduction in EMI. However, if you are getting the loan transferred, then first know and understand the processing fees and other hidden charges.

3. Talk to your bank

No bank indeed wants to lose its good customers. So, if your credit score is good and you have paid all the installments without a break, then you can go to your bank and negotiate to reduce the interest rate. You can tell about the offers of other banks, etc. You can do this after special interest rate cuts.

4. Increase the tenure, reduce the EMI
This is an option that should be chosen very carefully. If your financial condition is not good and you are not able to pay a big EMI, then you can go to the bank and increase the loan tenure. Let's say your loan is for 3 years, then you can reduce the burden of EMI by getting it extended to 5 years. This will reduce the EMI, but you will have to pay more interest in the long run.

5. Consolidate all the loans
So if you have a personal loan, credit card bill, and two to three small loans, then you can combine all of them and take a big personal loan. This type of loan is called 'debt consolidation'. Its advantage is that you get rid of the hassle of different EMIs. Apart from this, many times the interest rate of this new loan is lower than all your old loans, which reduces your total EMI.

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