Loan Tips: Just keep a close eye on this one thing in your loan, you will never get trapped in the debt trap..

Nowadays, many people are paying off some kind of loan. But most people don't understand how safe their Equated Monthly Installment (EMI) is. If you don't track your EMI, your debt burden gradually increases, and sometimes people unknowingly fall into a debt trap.

Your EMI should always be no more than 35% to 40% of your monthly income. If this limit is exceeded, your financial health can deteriorate. Therefore, you must always ensure that this limit is not exceeded.

Why is EMI tracking important?

EMI tracking isn't just about keeping track of how much money you're withdrawing each month; it also gives you an idea of ​​your overall debt situation. Suppose your monthly income is ₹100,000, your EMI should not exceed ₹40,000. This rule not only keeps you safe but also protects both your credit score and savings. Tracking your EMIs provides the following benefits:

You have a clear picture of your total liabilities.
Budget planning is easier.
The risk of overborrowing is reduced.
Timely payments improve your credit score.
Banks offer EMI calculators.
Most major banks, such as HDFC Bank, ICICI Bank, Bajaj Finance, and Kotak Bank, offer EMI calculators on their websites.
These tools allow anyone to calculate their interest and total repayment. Let's learn how to use them:

Open the bank's website.
Go to the "Loans" or "Tools" section.
Enter the loan amount, interest rate, and tenure.
Click 'Submit' and find out your EMI instantly.
You'll be in trouble! If you consider loan settlement and loan closure the same thing, find out who will ruin CIBIL!

3 Major Benefits of Checking EMIs
1. Avoiding the Debt Trap
If you carefully track your EMIs, you will have a clear view of your monthly financial obligations. You will know where you are overspending and when it is safe to take out a new loan.

2. Smart Financial Planning
Through EMI tracking, you can decide when to prepay or when it is better to transfer a balance. This reduces the interest burden and allows you to become debt-free sooner.

3. Improving Credit Score
Paying EMIs on time strengthens your credit history. This helps you get loans at better interest rates in the future.

How to Use the EMI Calculator?
Suppose you want to take out a personal loan of ₹5 lakh at a 12% interest rate for 3 years. You enter these details into the EMI calculator on the bank's website. Your monthly EMI will be approximately ₹16,600, and over the entire tenure, you will pay a total of ₹5,97,600, or ₹97,600 in interest.

Some Important Tips for Loan Management
Along with EMI tracking, it's also important to follow these practical steps:

Create a monthly budget: Include each EMI and expense in your budget so you can see how much balance is left.

Set up auto-debit: Turn on the auto-debit feature in your bank account to avoid missing EMI payments.

Don't take on multiple loans: Taking on multiple loans simultaneously increases your EMI load.

Review every 6 months: Review your EMI-to-income ratio every 3–6 months.

Seek advice: Consult a certified financial advisor if needed.

Why is it important to develop the habit of EMI tracking?
Many people in India focus only on paying EMIs, but don't understand their total debt. Tracking EMIs makes you responsible and prepares you for the future.

Not tracking EMIs can have several disadvantages:

The risk of overborrowing increases.

Savings decrease.

The likelihood of default increases.

Credit scores may drop.

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