How do I make repayments for an unsecured loan?
Curious about Unsecured loans
Repaying an unsecured loan, such as a personal loan or credit card, typically involves making regular payments according to the agreedupon schedule. The specific repayment process can vary depending on the lender, but here are the common methods used for making repayments:
1. Equated Monthly Installments (EMIs):
EMIs are a common method of repaying unsecured loans. Under this method, you'll make fixed monthly payments that include both principal and interest components. The EMI amount is determined at the time of loan approval and remains consistent throughout the loan tenure.
You can set up an autodebit instruction with your bank to ensure that the EMI amount is automatically deducted from your bank account on the specified due date each month.
2. PostDated Cheques (PDCs):
Some lenders may require borrowers to submit a series of postdated cheques at the time of loan approval. The lender will deposit these cheques on the respective due dates.
Ensure that your account has sufficient funds to cover the cheques on the specified dates to avoid any penalties.
3. Online Payments:
Many lenders offer online payment options through their websites or mobile apps. You can log in to your loan account on the lender's portal and make payments using net banking, debit cards, or other online payment methods.
Set up recurring payments or make onetime payments based on your convenience.
4. Mobile Wallets and UPI:
You can use mobile wallet apps or UPI (Unified Payments Interface) apps to make loan payments. Link your bank account to these apps and initiate payments as needed.
5. Electronic Clearing Service (ECS):
ECS is a system that allows automatic debit of your bank account for loan repayments. You can authorize the lender to deduct the EMI amount from your account on the due date.
6. Standing Instructions:
Set up standing instructions with your bank to automatically transfer the EMI amount to the lender's account on the due date each month.
7. Cash or Cheque Deposits at Bank Branches:
Some lenders allow borrowers to make cash or cheque deposits at their physical branches. Ensure you obtain a receipt for such payments.
8. ThirdParty Bill Payment Services:
You can also use thirdparty bill payment services like Paytm, PhonePe, or other similar platforms to make loan payments.
9. AutoDebit Mandate:
Many borrowers opt for autodebit mandates, where they provide authorization to the lender to automatically deduct the EMI amount from their bank account on the due date. This is a convenient and hasslefree method.
It's important to make loan payments on time to maintain a good credit history and avoid late payment charges or penalties. Keep track of your repayment schedule, ensure that your bank account has sufficient funds, and consider setting up automatic payment methods to avoid missing payments.
If you have any questions or concerns about the repayment process, loan account statements, or any changes to your repayment schedule, don't hesitate to contact your lender's customer service for assistance and clarification.