Rescheduling loans means extending or adding extra time to your existing loan tenure, resulting in a revision of your monthly instalment amount so that you can pay a lesser amount each month. It is a financial blessing to repay your loan amount in a shorter interval. People who take out a loan for 10+ years often feel indebted by the burden of paying EMI. However, their choice was to schedule for a more extended period and reduce the EMI amount, but later the emotions changed. If you feel confused or stuck about a loan, here is a solution to reduce those years of indebtedness by paying more EMI or advance EMI. Well, it is one way; here, we will discuss five ways to do it differently. Before that, let's understand rescheduling technically.
Rescheduling, often referred to as debt rescheduling, is a way to reorganise the repayment of debts. The borrower might be an individual, company, organisation, or even a country. Rescheduling, which is sometimes called a loan modification, maybe in the form of:
? A combination of lower interest payments but a more extended period during which they are collected. It is a long loan spread, with a low amount distributed over a more extended period.
? We are arranging for a later repayment date. These are rearrangements, and you need to discuss these with your financial advisor.
? Lowering the interest payments but raising how much eventually has to be paid.
? You can negotiate the old one with a new loan (usually called debt restructuring).
Top 5 Ways For Reduction of Loan EMI
Pay Higher Amount of Down Payment
The down payment is the amount the customer pays upfront when purchasing the individual item. Since a part of the total price of the article is borne by the customer, the amount that the customer will have to borrow as the loan will also come down. A loan's interest is calculated based on the principal amount borrowed by the customer. Therefore, the higher the loan amount, the more you will have to pay as interest and the higher your EMI amount will be.
Opt for a Longer Loan Repayment Schedule
The term of loan repayment is inverse variation to the amount of EMI for a particular loan. When you opt for an extended loan tenure, the total due amount is distributed over a more extended period. This, in turn, reduces the payable amount in monthly instalments. However, choosing for a longer term also means you will be charged a rate of interest on the outstanding debt for an extended duration.
Select Step-Down EMI Plan, Know More
Numerous banks and non-banking financing companies provide their customers with the option of a Step-Down EMI Plan. According to this scheme, when a borrower avails of a loan, they have to pay a more significant amount as EMI during the start of the tenure. Astime progresses, the EMI amount gradually decreases as the principal amount decreases after each monthly payment.
Consider Taking Loans With Your Existing Bank
If you're already a customer with a particular bank, consider the same bank for purchasing a loan. This could work in your favour if you have a good standing with your bank, in which case they are likely to provide you with a lower rate of interest on your preferred loan. Banks welcome loyal customers, and the trust allows them to sanction loans quickly. It also reduces the complexity, number of documentation and time taken for approval. Every loan seeker should take a loan from the existing bank to avail many other benefits of being a long-term customer.
Negotiate With Bank For Lower Rate
Considering the above point, where the individual has a good standing with their bank, they may be in a position to negotiate with the bank for a lower interest rate on a loan. Banks may be willing to do so for their existing customers to increase brand loyalty and attract more customers. If you cannot do it professionally, ask your financial advisor to represent you and convey your thoughts through proper application and filing of documents.
The best way to do it is under the guidance of financial advisors. It allows you to focus on the most beneficial option that you can choose. Plus, it will enable you to understand different perspectives of the situation. Loans paradise is here to guide you about the loan, loan rescheduling or any other financial aid that interests you. Connect with us to discuss your needs.
