Dr. Ankita Kale, a practicing doctor, is engaged and is set to get married soon. As the cost associated with the wedding is huge, she may have to save for her forthcoming marriage. The option of borrowing a loan from a well-known lender is a preferred choice for her as she may use the borrowed finance to fund her marriage. Therefore, she has availed of a personal loan from Tata Capital and wishes to seek advice on repaying the loan.
Following are five tips to consider when repaying Tata Capital personal loans.
1. Make timely and regular payments
It is important to pay your Equated Monthly Installments (EMIs) regularly and on time. If not, you may incur a certain fee for late payment. Tata Capital levies a 2% charge on every outstanding month for the delay in payment. Hence, it is advisable to make payments on time so as to avoid additional fees. Besides, missing a payment affects your Credit Information Bureau (India) Limited (CIBIL) score. This, in turn, will reduce your approval chances the next time you apply for a personal loan.
2. Choose electronic modes to make payments
You may conveniently make payments through online transfer. You may also opt for the process of Electronic Clearance System (ECS). This ensures the amount is automatically debited from the nominated account. Further, you may also repay through post-dated cheques in favor of Tata Capital Financial Services Limited.
3. Opt for a flexible repayment option
Typically, a loan is repaid through fixed amounts over the loan tenure. However, Tata Capital offers flexible repayment plans such as Step Down Flexi Plan, Step Up Plan, and Bullet Flexi Plan. You may, therefore, step up (increase your EMI amount) or step down (decrease your EMI amount) according to your cash flow. Due to the benefit of flexible repayment, Tata Capital personal loans are a preferred option for numerous loan borrowers.
4. Prepay whenever possible
If your financial position allows you to do so, make a prepayment on your loan. In case you have received an annual bonus or surge in funds due to the sale of an asset or any other reason, you may opt for prepayment. However, it is important to note that Tata Capital permits part prepayment (without charges), 180 days after the loan has been disbursed. Moreover, you are allowed to prepay up to 25% before 180 days. However, if you wish to prepay more than 25% of the amount, you are required to pay 2% prepayment penalty.
5. Request an amortization schedule chart
An amortization schedule gives you complete information about the outstanding loan amount, EMI amount, rate of interest, and loan tenure. You may use such information to your advantage while making loan repayments. Such loan-related details will assist you in having complete knowledge about the various costs and the outstanding amount of your loan.
Paying off debt is indeed a huge responsibility. It is essential to consider these points while making repayments. These tips will go a long way towards ensuring that you make financially-sound borrowing decisions.
