3 Ways to Avoid Defaulting on Your Personal Loan

Today, when faced with a financial emergency, there are three main avenues that you can explore with respect to securing emergency funds. There are traditional banks, credit cards, and personal loans. No prizes for guessing the most popular option out of the three – personal loans, of course. Ask anybody and they’ll tell you that they apply for a personal loan the minute they have a financial emergency, given how convenient it is to get one today. The paperwork involved is minimal, you can use it for a variety of purposes, and most lenders offer a TAT of just 3-4 days! Thanks to these positives, getting a personal loan has definitely become easier than it used to be.

What’s more important though, is paying it off on time, at regular intervals. Defaulting on your personal loan payments is a strict no-no because doing so would impact your credit score negatively, which would make it difficult for you to get loans in the future. Here are three tips for you to help you avoid the same. Read on:

1. Track Your Loan Online

Today, all lenders give you the option of tracking your loan and its EMI payments online. Some banks and other financial institutions also have their own money loan app, which you can download and use on your smartphone. Through such apps, you can apply for a personal loan from the comfort of your home itself, since the entire loan application process (in most cases) happens on the app itself. Once the loan funds have been disbursed into your bank account, you can instantly keep track of your repayments and know all the requisite information (your EMI amount, the repayment date) in advance on the app. If you’re able to track your upcoming payments, you’ll be less likely to default on them.

2. Switch to Simpler Terms

When we look to take out a loan, all of us obviously want to find the best personal loan that suits our needs. In doing so, the first thing you need to do is to read the loan agreement carefully, understanding all terms and conditions. If you still feel that you won’t be able to pay off your loan EMIs on time, then maybe it’s time for you to switch to simpler repayment terms – something that works for you without affecting your monthly budget too much.

3. Borrow Only What is Necessary

This being the most important point of the three has been saved for last. If you borrow basis your needs and not your wants, then you won’t even have to worry about a possible default. Many a time it may cross your mind that having a ‘buffer amount’ (as in a little extra in case of an emergency) wouldn’t be a bad idea. But it is. Not only are you spending money you don’t need, but you are also increasing your loan EMI amount unnecessarily. If you really require the extra money, though, make sure you plan and budget your EMIs properly when you apply for a loan, so as to avoid a default.

In Conclusion

We hope that the above three points were enough to drive home the importance of paying your personal loan on time. If you are on the lookout for a personal loan provider that offers fast and easy access to short-term funds, KreditBee is a good option you can consider. Apart from their easy-to-understand process and the minimal documentation required, their application process is also 100% online. All you need to do is download the app, complete your profile, and leave the rest to us. If you wish to learn more about our personal loans, write to us at [email protected] or simply call +080 44 292 200.