Repayment process

Once you select a personal loan, the repayment has to be done on a regular monthly basis for a specified tenure. The EMI (equated monthly installment) has to be paid by the borrower without a break. This might look disciplined but it could make some people worse-off. It should be noted that even if the credit card issuer insist on a minimum payment of 5% per month, the monthly payment could be high. This is especially valid if one opts for a short term personal loan.

For example if one has an outstanding of Rs 100,000, the monthly payment at 5% will be around Rs 5,000 and if this amount is converted into a one year personal loan at 18%, the personal loan EMI calculator evaluates the monthly payment to around Rs 9,000 per month. This will put an abrupt burden on your budget and may lead to a situation where you start dis-saving for paying out the loan. Your investment portfolio might take hit under such circumstances. Hence it is important that you select a right tenure where your future safety does not come under question.