Things to Know about Loan Repayments
A financial crisis is unpredictable and may arise at any time in life. At such points, it is a relief to know that funds are always available in the form of personal loans. Whether you need finance for an important purchase, to celebrate a special moment in your life such as a wedding, or simply for an emergency, personal loans will act as a life saver.

If you are taking a loan for the very first time, deciding how and when to make payments may be a confusing affair. In fact, if you speak to anyone who has already availed of loans, you will probably find out that this aspect of it has troubled them too. The main reason for this is an initial lack of awareness while taking a loan. So, if you are applying for a loan for the first time, here are some easy tips to follow to help you repay your loans well on time and thereby maintain good credit scores.

Compare your monthly installment to your income
The first step when applying for a personal loan is to check out the equated monthly installments (EMIs) that you will be required to pay. Compare these to your paycheck. Your EMI should not take up more than 50% of your monthly income. You should always have funds left to manage other expenses such as the basic necessities and at the same time, be prepared for any financial emergencies that may crop up.

Check if your bank offers flexible installments
There may be instances where you have landed a good bonus at work and you are thinking of increasing your payments. Check if your bank allows you to opt for flexible repayments. Alternatively, check if your bank allows for more than a single payment every month. Some banks also offer decreasing installments where the amount goes down each month, thus making repayment easier. These are ways in which you may end up repaying the loan on your own terms, depending on how your finances hold up.

Set up automatic monthly payments
Often, with so many responsibilities mounting all around, missing a single installment may be a very real possibility, despite all your efforts. Missing your installment may land you in deep trouble with late fees as well as an undesirable blip on your credit score. The best way to ensure timely payments is to set up automatic payments that go out from your account towards your loan each month. This will ensure you keep a good credit record and never go late.

Check the prepayment penalties
Before settling on a particular bank for your loan, find out about their early repayment penalties. While all banks charge a certain fine for repaying in full before the loan term ends, some banks charge more than others. So, you would be better off choosing the bank that charges the least amount in terms of foreclosure fees and penalties.

Talk to a loan consultant
Finally, as a first-timer in opting for a loan, you would probably have a lot of questions and the internet or the bank website may not always have all the answers. In this case, it helps to talk to a loan consultant. A loan consultant will ask you questions related to the purpose of your loan, your annual income, and your monthly expenses. Subsequently, he or she will help you take the right decision with the loan amount, offer suggestions on banks to consider, and even advise you on setting up repayment options. Loan consultants may be contacted at bank branches or may even be approached online.