Personal loans come as an easy and effective aid to our financial problems. Since it takes very little time for a personal loan to get approved, it can be used for emergencies as well as for paying off other debts. An important thing that you must always keep in mind before selecting a loan scheme is the interest. Make sure you get the best deal out there. Calculate the interest rate and carefully lay out the amount you will have to pay as your EMI. You should use a personal loan calculatorto calculate that. A personal loan calculator is available online, accessible both from your smartphone as well as desktop. Use that to first determine the amount.

A personal loan calculator will help you calculate the EMI you need to pay on your loan. SOURCE: financialmentor.com

After availing the loan, repaying it is the ultimate challenge that comes your way. The following steps will guide you to regulate your financial habits which in turn will help you tackle the EMIs.

1.  Lay Out Your Budget Judiciously

Once you have the responsibility of repaying your personal loan, you need to make a monthly budget. This budget should include all the money that you require to spend on your basic amenities like your electric bill, rent, groceries, food and travel allowances and bills for any other monthly subscription. Along with that, set aside some amount of money for luxury like trips, dining out, concerts, movies etc. Try to keep your expenses with this limited budget.

Use a personal loan calculator to devise the budget more effectively. Try to keep your expenses within the stipulated calculations and do not rely on the conviction that you would make up for that expense in the next month. Let us face it that never happens. Once you begin to take liberty in your budget, it is impossible to stop. This will finally lead you to use the money meant for your EMI.

2.  Pay the EMI Straightaway

Once you get your salary or profit from your business, paying the EMI should be the first priority of the month. Once it safely goes over to the loan issuer, you can rest assured for the rest of the month and it will compel you to make expenses wisely. For spendthrifts who find it difficult to curb their expenses, this is the only way which could save them from further financial havocs.

Paying the EMI as soon as possible also ensures your security against snares of late fees and penalties which multiplies themselves monstrously and even before you realize, you will find yourself in a debt much greater than you had expected. There are several other ways as well to avoid paying high interest.

3.  Pay in Advance

Paying on time is alright but a step ahead is a mark of good money handling. Along with the stipulated amount that you are required to pay as EMI, pay a little more in advance to ward off the burden. Learn to pay in advance if the upcoming month requires you to spend more. For example, if you have a trip planned in December, try to clear your December dues by the month of November. You can either divide and pay in small amounts over a few previous months or pay the total amount in November. This will help you tackle the financial strain.

Also keep an account of your EMI, rates and so on using apersonal loan calculator.

4.  Do Not Take Several Small Loans

Often people end up taking smaller loans to get through the financial crisis while they are paying EMIs for an already existing personal loan. This is probably the most common mistake that people make. They think it will ease their problem but on the contrary, it only adds on to their interest rates. Several smaller loans will prove more draining than one large loan. If you are to calculate this on a personal loan calculator, you will realize how much additional money flows by.

5.  Try to Improve Your Credit Score

Improving your credit score will be beneficial in the long run. If you pay your EMIs and bills on time, your credit score will automatically improve which in turn will secure your chances of getting personal loans at a lower rate of interest in the future. Paying EMIs on time will affect your market image as a whole. No company wants to deal with a defaulter. Let this be a motivation for you to pay your EMI on time.

Also, a good credit score is not a license for late payment. It should not be misused, instead, your goal should be to improve it further or simply maintain it.

These few tips, if followed will help you maintain a clean sheet in the financial market and will also make your life easier. None of us wants a life torn apart by debts. The only way to avoid that is to pay on time. Remember a thoughtful spender can never be harassed. Do not let your money control you but the other way round.

Donny white