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Personal loans are an easy and quick way to get financial assistance in case of an emergency. A borrower can generally get a personal loan without any collateral. Most personal loans come with a flexible repayment schedule that ranges between 1 year and 5 years.
SBI Bank is known to offer customers the option of choosing the loan tenure that is most convenient for them. While customers have the option of selecting a repayment tenure and EMI options that are comfortable for them, there are many instances where the borrower could have trouble repaying the EMI for a particular month or time period.
There are many charges involved when one defaults in paying personal loan EMI. There are penalties, cheque and other miscellaneous charges involved. And if consequently every month one defaults, the charges keep building up with the EMI amount. Hence one gets burdened under increasing debts. This is why it’s best to make regular and timely payments.
About SBI Bank Personal Loan EMI
Missing out on timely EMI payments for SBI Personal loan could have some negative impact and here are some of the points that borrowers must take note of:
While seeking a personal loan, here are some of the important facts to take note of.
Better Interest Rate - The interest rate on a Personal Loan is competitive. However, it makes sense to compare interest rates across lenders. If one gets the best rate, it will reduce the interest outgo, and this will make repayments comfortable.
Flexible Repayment Tenure - The repayment tenure for Personal Loan could range from anywhere between 12 to 60 months. One has the option to decide the tenure. Note that a higher tenure can reduce the EMIs, making repayments comfortable, while opting for a lower tenure (of say 2 to 3 years) increases the EMI.
It could be a problem if one has been missing out on EMI payments on SBI Personal loan. A missed EMI or an overdue on a personal loan EMI can spiral into a debt trap over time. Here are some of the reasons why it could be bad for any individual who is looking to maintain a good credit reputation:
Lower Credit Score - Credit score is a check of one’s credit health and repayment capabilities. To maintain a healthy debt profile, it is advisable to keep debt records clear. Identify areas where there is a debt problem and try to work on them. For example, one may find himself stretched on the monthly budget and may, therefore, have missed a payment deadline. To get an infusion of cash and comfortably make room for other purchases, anyone would wish to consider additional Personal Loan to ease the finances. Timely repayment of Personal Loans can energise an individual’s credit score.
Impact on Savings - Saving money for future financial needs can help one achieve various financial dreams. Low-risk investment avenues such as Recurring Deposits, Retirement Schemes, and Mutual Funds allow one to invest regularly. The advantages of compound interest can be availed by making periodic/monthly investments. Lack of savings could also be the primary root cause of missing on EMI payments.
Multiple Loans - Repaying multiple loans each month could be painful for any individual! It can get exhausting to repay different loans at different times each month. It is best to consolidate all the loans under one loan umbrella to ensure a fixed rate of interest, a single repayment window every month, and peace of mind.
Here are some of the ways in which a borrower can avoid loan defaults on SBI Personal Loan.
Periodic Financial Planning – Personal loan borrowers must aim to plan their finances more efficiently and well in advance in order to avoid the chances of defaulting on a loan.
Adjusted EMI – In case of any chances of defaulting on a loan payment, the borrower must approach SBI and inform them of his financial circumstances and request for a lower EMI. SBI Bank has certain flexibility options for lowering EMIs by either extending the existing loan tenure or changing an unsecured loan to a secured loan. If the loan is converted to a secured loan, the interest payable on the amount borrowed is also lower. Converting an unsecured loan to a secured loan is an ideal solution since the reduction in EMIs is significant as compared to extending loan tenures.
EMI-free Period - SBI bank can provide an EMI-free period in case a borrower faces a crunch in the inflow of finances. Such requests are considered by the bank, especially if they have lost their job or are temporarily facing issues with business operations. The bank may consider giving customers a 3 to 6-month waiver on EMI payments, following which the borrower must resume EMI payments.
Part Payments – Lowering the EMI payments and the interest rate can be achieved by making part payments. This helps in ensuring that the borrower makes timely EMI payments for the entire loan tenure. When the borrower has surplus funds and an active personal loan, making a part payment can ease the financial burden.
It is up to a borrower how he or she uses the facility of Personal loan offered by SBI Bank. However, the most important aspect to note is timely EMI payments on such loans to ensure that the credit standing is unchanged. This can increase the scope of applying for such loans in the future.
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