20 March, 2025 | 11:00 IST
A personal loan is a convenient financial tool if you need funds quickly for expenses such as a wedding, home renovation, children’s education, or a medical emergency. Remember when opting for a loan, it is essential to consider various factors, especially the repayment schedule and interest rate.
With borrowing money comes the responsibility of repaying it. A repayment schedule serves as a roadmap to help you pay back the borrowed money on time. It’s essentially a tool to manage your financial commitments.
Let’s dig deeper into the details of a repayment schedule and its importance.
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A loan repayment schedule outlines how a borrower will repay the loan over time in a structured and systematic way. It covers key information such as the monthly installment amount (EMI), interest rate, payment due dates and the remaining balance after each payment. Borrowers can better manage their money and prevent defaults by understanding this schedule.
Each bank has a different repayment structure. The bank’s procedures, the loan type, the borrower’s needs and repayment preferences and other factors all play a role in determining the schedule.
Moneycontrol has teamed up with seven lenders to offer quick, 100% digital loans up to Rs 50 lakhs. The process is simple and fast, involving just three steps: entering your information, completing the KYC procedure, and selecting the EMI tenure. Interest rates start at 10.5% per year, depending on your income and credit score.
ALSO READ: Personal Loan Prepayment: Key points to consider before paying off your loan earlier
A personal loan repayment schedule provides a detailed breakdown of how you will repay your loan over time. When you take out a personal loan, you agree to repay the loan amount along with interest over a set period. The repayment schedule helps you track your monthly payments.
The schedule helps you understand your financial obligations, which is crucial for effective budgeting, minimising interest costs, avoiding penalties and paying off the loan efficiently.
Ultimately, the repayment schedule is an important tool for managing loan payments, strengthening your financial security and making wise borrowing decisions.
Understanding it thoroughly can help you take charge of your finances and avoid unnecessary financial stress, whether you're borrowing for an emergency or debt consolidation.
1. Budgeting
Knowing how much you need to pay each month makes it easier to manage your expenses. By setting aside the required amount, you ensure timely loan payments.
2. Interest savings
In the early months of your loan, a larger portion of your payment goes toward interest. Understanding how payments are divided between the principal and interest can help you pay off the loan faster.
3. Avoiding late fees
A detailed repayment schedule with clear due dates helps you avoid missing payments. This prevents late fees and protects your credit score
To make you better understand a personal loan repayment schedule, here's an example:
If you take a personal loan of Rs 100,000 at an interest rate of 10 percent per annum for a tenure of 12 months, your repayment schedule would be structured to include both the principal and the interest. The interest will be calculated annually, but you’ll make monthly payments that cover both the interest and the principal amount.
Over the course of 12 months, your total repayment amount will include the Rs 1,00,000 loan amount plus the 10 percent interest, which is Rs 5,499. This means that the total amount to be repaid over the 12 months will be Rs 1,05,499. Your monthly EMI would be approximately Rs 8,792.
EXPLORE: Personal Loan EMI Calculator
Moneycontrol has partnered with eight top lenders to offer seamless, 100% digital loans up to ₹50 lakhs. The application process is easy: share your details, complete the KYC verification and select your EMI options. Based on your employment status, you could receive loans with interest rates starting as low as 10.5% per annum.
1. Set up automatic payments
Instead of manually paying every month, consider enabling auto-debit for your EMIs. This ensures you never miss a payment.
2. Make prepayments whenever possible
You don't have to stick to only the set payments. Making prepayments towards the principal can help you reduce the loan balance faster and minimise interest.
3. Avoid borrowing more than you can afford
It’s easy to get into debt if you take on multiple loans. Ensure that your total EMI payments do not exceed 30 to 40 percent of your monthly income to avoid financial stress.
4. Monitor your loan statement regularly
Regularly check your repayment schedule to ensure that payments are being processed correctly and that you're on track to repay the loan.
5. Mind relaxation
Having a detailed repayment plan brings peace of mind. You may feel confident knowing that you have control over your finances. It reduces the pressure that comes with loan management.
A personal loan repayment schedule is a useful tool for borrowers to effectively manage their debt. It gives a detailed explanation of how the loan will be paid back over time, enabling borrowers to make wise financial plans and stay out of trouble.
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