In today’s fast-paced world, getting a loan is a common practice, but to repay them, navigating through EMIs can be both seamless and challenging. Undoubtedly, EMIs make managing larger and unexpected expenses stress-free, but failing to understand the potential risks can lead to financial strain.
Knowing about your mistakes is as important as getting loan approval to make the most of your journey and avoid stress. In this blog, we’ll learn about the most common mistakes to avoid by using tools like EMI calculators and tips for effective EMI management.
7 Common Mistakes to Avoid
To make the loan application stress-free and seamless, here are some of the common mistakes you should watch out for:
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Underestimating Total Loan Costs
When applying for a loan, you should always consider the total cost and not just estimate the monthly payments. Lenders charge a rate of interest, along with other fees, that increases the overall expenditure of the loans.
Tip: Estimate the total cost of the loan, including the interest rate and fees, and then make a decision. This will help avoid unnecessary future surprises and allow you to compare different loan offers.
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Choose Wrong Repayment Tenure
There is no doubt that if you choose short repayment tenure, you’ll save costs and might be able to negotiate for lower interest. However, an inappropriate repayment tenure can have a negative impact on your finances.
Tip: Carefully evaluate your overall loan costs and whether they fit the monthly budget, and then decide on the tenure. The repayment time you choose must always align with your financial goals. You can even use an EMI calculator to compare offers from different lenders and know what’s best for you.
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Not Making a Budget
When you choose not to make a budget, you are potentially overestimating your expenses, which can lead to financial stress in the future. Avoid stretching your budget and leave some room for other expenses.
Tip: Make a budget for all your monthly expenses, including utilities, groceries, and EMI payments, and stick to it. Check if you have enough money to cover your daily expenses and loan. This will help you decide whether you are financially prepared to take the loan and determine the repayment tenure.
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Not Considering No-Cost EMI Options
A no-cost EMI personal loan is a fantastic option for those with limited budgets who need a loan to cover expenses. This option reduces the cost of the loan, making it more affordable and accessible to many.
Tip: Explore your options, do your research, and compare different offers. No-cost EMIs help ease the financial burden and make the loan repayment process seamless. Check if your lender offers a no-cost EMI option and then make an informed decision.
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Ignoring Extra or Hidden Charges
The biggest mistakes borrowers make while getting a loan are not reading the terms and conditions carefully and signing the fine print without reviewing everything. Lenders charge various fees, including processing, prepayment penalties, or platform fees, that can increase the cost of the loan.
Tip: To avoid such extra charges, read all the documents carefully, ask questions from the lender and beware of the actual cost of the loan you are taking. Take your time to learn about everything to avoid future surprises.
Choose a reliable lender like Stashfin, which promises transparency and ensures the borrower is fully informed of all charges.
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Ignoring the Importance of EMI Calculators
With technological advancements, various online websites have introduced the EMI calculator. This online financial tool helps you calculate the potential costs of the loan based on the amount you are considering borrowing, your interest rate, and repayment tenure.
Tip: Make the most of these calculators to get an estimate of the loan amount and determine if you can afford it. You can even compare different variables to decide the repayment tenure best suits your financial needs.
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Overburdening Yourself with Multiple EMIs
Taking multiple loans on different can potentially increase your financial burden and monthly expenses. Too many loan applications may even lead to a lower credit score, which is not suitable for your portfolio.
Tip: Make a priority list, carefully assess your budget, and decide what is best for you. This will make the process convenient.
Stashfin: Your Partner for Responsible EMI Management
Stashfin is one of the leading online financial services providers. It stands out for its numerous features and instant loan approvals. Stashfin is committed to making the loan application process seamless for our applicants.
Here are some of their top features:
- Our EMI calculator helps borrowers estimate the total loan cost, helping them make a budget.
- Stashfin promises to be transparent about the terms and conditions of the loan application and to ensure that you know all the charges.
- Borrowers can enjoy Stashfin’s 30-day interest-free credit period.
- We offer credit up to ₹5,00,000 at competitive rates and flexible repayment tenure.
Final Thoughts
While EMIs help manage large expenses, borrowers must be aware of mistakes to avoid future stress. Follow the tips mentioned above and explore your options, including no-cost EMI personal loans, and make the right choice that aligns with your goals. Start your journey with Stashfin today!
