Today, there may be numerous reasons that may prompt you to avail a loan for your financial needs whether it is to pay for hospital bills, buying a new home or vehicle, higher studies, business needs or even consolidating your debts. The convenience and easy application for loans make them a popular financial tool among people. You can “Apply For Loan“ despite of taking it as liability as there are flexible repayment options offered by the lenders these days.

In addition to that, getting a loan can help you to attain a strong credit report with a positive repayment history. Therefore, when you want to avail higher credit in future, such as business loan or home loan, lenders will review your application favorably because you would already have proved yourself as a low risk borrower. Now, we will take a look on some of the top reasons for which people avail a loan:

✓ To fulfill personal aspirations: Every single person has a set of aspirations that they want to achieve in their lifetime such as buying a fancy gadget, home renovation or buying a luxury car. A loan can help you to meet all these aspirational purchases because most of people still live on fixed monthly income.

One does not need to dig into his/her emergency funds to finance these expenses ensuring your loved ones are taken care if you are not there. A loan can help you to make these purchases easily and you can pay the lender in easy installments. You can also use EMI calculator to get an estimate of your installments and set budget accordingly.

✓ To consolidate the debts: In case, you have missed some of your previous loan EMIs or credit card bills then you have fallen into a debt trap. One can use a loan as financial route to consolidate such debts to tackle the situations and bring all your financial liabilities under single roof. Moreover, when you bring multiple repayments to a single monthly payout, it will help to boost your credit rating.

✓ To fulfill business needs: The major challenge in setting up or expanding a business is to find a funding for it. It is a fact that everyone is not blessed with significant savings so to overcome such scenario, opting a loan could be a best way to fulfill your business needs.

You just have to meet basic eligibility criteria proposed by the lender with a robust business plan. Once you fulfill the criteria, your loan will be disbursed into your bank account and you can utilize it to fund various business operations.

✓ To meet emergencies: However, you are prepared with some savings but future is unpredictable and you may face some circumstances where you are not in position to meet the financial expenses such as medical bills, emergency travel and car breakdown etc. therefore, you can “Apply For Loan Online“ to meet the entire expenses.

Hence if you need a quick flow of cash, a loan is undoubtedly the best way out. One can avail a loan after reviewing all the terms and conditions as well as the interest charges applicable on it to make the loan journey stress free.

An EMI or equated monthly installment is the payment which you are charged for repaying the loan amount you are approved for and interest charged on it. It will not be the same amount until the end of the repayment period. There are number of factors that impact the amount of the installments that you pay towards the principal amount when you “Apply For Loan“. We have mentioned some of the factors that can highly affect your EMI in this article. Let’s have a look:

Change in interest rate: Your rate of interest can vary many times during the tenure of the loan. However, it can impact you in both positive and negative way as if interest increases, you will have to repay more EMIs whereas a reduced interest rate can lower your installments.

Generally, there are two types of interest rate- fixed and floating. If you choose fixed interest rate on your loan, then changes in the rate will not affect your EMI but if you go for a floating rate of interest on your loan, then your EMI keeps on changing with the change in RBI rate guidelines.

Prepayment of loan: One has a right to prepay a lump sum amount to close the loan. Every lending institution has a provision for extra payments made over and above the equated monthly installments. Some of the lenders will allow you to prepay the loan but will levy 1-3% charge for foreclosing the loan.

One needs to be cautious and should know the terms and conditions about prepayment charges before availing a loan. Most of the lenders waive off the prepayment charges if you are paying off from your own pocket such as using your bonus or investment, however, if you are taking a loan from other lender to pre pay the existing loan, they can charge you more.

Change in repayment period: When you negotiate your loan tenure with your lender or planning to switch to a new lender with a new repayment structure, it will surely change your EMI. To exemplify, if you switch to a long tenure, then you have to pay a less EMI but if you opt a short tenure then your EMI will be high.

One of the associated benefits with short tenure is that one can repay the loan faster but a long tenure will result in less EMI which can shed off your loan burden. The only disadvantage of long tenure is that you will end up paying more.

Flexible repayment options: Every financial institution provides you flexible repayment with step up and step down options. One have to pay lower EMIs at the start and as the tenure reaches end, one pay higher EMIs in the step up process which is good for people who take a home loan in early age while in step down, one will pay higher EMIs in the initiative period and as the tenure reaches the end, he/she will pay lesser EMIs which is better for individuals who are near to their retirement.

You can switch to ShubhBank to “Apply For Loan Online“ or offline that provides number of loans for fulfilling your requirement and offers the best EMI for you.