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An online EMI calculator for personal loan can help you check how much you can save by reducing your EMIs before you opt for the balance transfer. But before opting for personal loan balance transfer, do a detailed cost-benefit analysis to ensure the amount you save on the interest is significantly higher than the costs incurred during the loan transfer. Some lenders may also offer longer tenure for personal loan balance transfer. Transferring your personal loan: You can also consider transferring your personal loan to another lender offering lower interest rates.Depending on the lender, prepayments may also incur prepayment charges. Personal loans usually have a lock-in of one year after which you can make partial or full loan prepayments. If not, tenure reduction is wiser choice as it will help you save more on your loan’s overall interest cost. Go for lower EMIs only when you are struggling to repay your existing EMIs.
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Making prepayments whenever possible: When you partly prepay a loan, you pay a portion of the outstanding loan amount early, which in turn gives you a choice to either reduce EMI or tenure.To reduce your personal loan EMI payments, you can consider: In case the new tenure goes beyond the maximum period permitted, then the lender may increase your EMI. In case of an increase in the floating interest rate, if the borrower permits, the lender may extend the loan tenure while keeping the EMIs same. When these benchmark rates change, the rate of interest applicable also changes. In case of rate change in the floating interest rate: Some lenders offer personal loans at floating rate of interest, which are linked to their external benchmark rates.Read in Detail: Pros and Cons of Personal Loan Prepayment Otherwise, reducing tenure is more beneficial as doing so will reduce your loan’s overall interest cost.
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So, you can choose to reduce EMIs if current EMI amount is causing strain in your finances.