How to Reduce Emi of Existing Personal Loan? (2024)

FAQs

How to Reduce Emi of Existing Personal Loan? ›

Deciding to refinance a personal loan might be a good option if your credit score has recently improved, which can help you score a more competitive interest rate. You can also choose to extend your repayment term, although this may mean paying more overall.

Deciding to refinance a personal loan might be a good option if your credit score has recently improved, which can help you score a more competitive interest rate. You can also choose to extend your repayment term, although this may mean paying more overall.

You can lower a monthly personal loan payment if you qualify for a lower interest rate or choose a longer repayment term. However, choosing a longer repayment term without a lower interest rate can cost you significantly more interest over time.

Can I lower my monthly personal loan payment? You'll pay less for your personal loan as a whole if you refinance and are able to secure a lower interest rate. Lower minimum monthly payments are offered when refinancing to a longer loan term.

5. Request the lender for an EMI-free period. In exceptional cases, such as a business halt or job loss, your lender may allow you to Stop paying your EMI for three to six months at their discretion. After this period, you will need to resume your regular EMI payment as perschedule.

You might know that the lender decides your interest rates based on your financial profile. However, did you know that you can negotiate your personal loan interest rates? Yes, you heard it right. You can negotiate your loan interest rates from the lender and adjust your EMI.

For example, if interest rates have dropped since you got your personal loan, you could refinance to get a lower rate. Similarly, you could also refinance to shorten the term (if you can now afford higher payments) or lengthen the term (if you need your monthly payments to be lower).

Can I reduce my monthly personal loan payments? ›

There are two strategies that you can use to lower personal loan payments. The first option is to extend your repayment term and repay what you owe over a longer period, and the second is to utilise debt management services such as debt review to reduce your monthly repayment.

Using extra money to make principal-only payments can be a good move to reduce the total cost of your loan. The key is whether it makes sense for your financial situation — and you'll need to review your loan paperwork or contact your lender first to confirm if and how they accept principal-only payments.

Refinancing a personal loan is more likely to benefit you in the following situations: Your credit has improved. You'll likely qualify for a lower APR that can reduce your monthly and overall borrowing costs. Interest rates have dropped.

Build a good relationship with your bank: If you have a history of making on-time payments and maintaining a healthy bank account balance, your bank may be more willing to work with you to lower your interest rate. Be polite and persistent: When you call or visit your bank, be courteous and respectful.

You might be able to get your payments reduced or paused. Contact your lender - they should work with you to stop your debts from getting worse. Your lender might agree to: reduce or stop charging interest on your arrears.

If you have extra cash and you want to reduce your EMIs, you can choose a part-prepayment facility and pay off your debts earlier than expected. Depending on the borrower's decision, this can result in either lowering of your EMIs or shortening repayment tenure.

Personal loan fixed ROI (Monthly reducing basis)

In a personal loan with a fixed rate of interest (ROI) on a monthly reducing basis, the interest rate remains constant throughout the loan tenure. The term "monthly reducing basis" is a method of interest calculation.

Steps such as freezing or reducing your loan repayments may be possible, depending on your situation and lender. To consider any of these options, you'll first need to contact your loan provider and let it know that you're struggling to make your repayments.

Usually, the loan amount is sanctioned once the borrower applies for an agreed amount and can not be reduced, especially, after release.