EMI – the financial web,Balancing income and expenses is a tight rope walk!In this age of heightened life styles, the financial fall can be a great one. Everyone is busy proving the other person lowly, and in the process finds newer ways to achieve his supremacy- by investing in electronic gizmos, vehicles, equipments and larger homes. All this as an extension to his high-rising lifestyle. The winners in this game are shop-keepers, credit Card Company and your family, at the cost of a poor you!
When you are busy flaunting your brand wares, the month passes rather soon and it is payback time. The monthly bills and the EMIs scare you out of your wits. But you manage to scrape through EMIs month after month. Pledging to use the card judiciously soon is forgotten and the bills are cluttered with EMIs every time. The EMI must go in time; a credit card rules your money line! EMI is a monthly installment towards the purchases, as a borrower the EMI is a monthly amount payable, for number of months, and the date of payments. The EMI payment mode helps you plan a budget and is the most convenient form of payments (Home Loans, Personal Loans) favored by borrowers and recommended by lenders.
EMI is so worked out that initially the amount comprises of more towards interest amount and less principal amount- with time the equation changes to vice versa. The EMI covers interest and principal equally reaching to a zero by the last EMI is paid.
Though the EMI is dynamic in nature and can be confusing at times, refer to EMI calculators on the internet- various combinations of principals, interest rate and tenure. Ideally the EMI duration varies from 6 months to 3 years. The 6 months to 3 years range is broadly based on the average income, bank statements from last year to six months, check bounces, other loan commitments. Loans for home loans banks need to look into last 3 years income.
• Secondly residence stability, longer the stay the better.
• Similarly with jobs more than 1 year or more than six months experience.
• Maintain bank balance of 1.5 times the planned EMI.
• No credit card late fee debts, no cheque bounces.
• 6 months to 3 years EMI bracket is most recommended
• The watchword is pay EMI in time, missing on them means extra credit charges.
• Request the Credit card Companies to lower interest rates.
• Minimize expenses and control unnecessary spending habits.
It is easy to get carried away by the trendy lifestyle, earn before you pay is the best policy! To begin with, only go in for loan if you can afford to bear the EMI burden, stay within your limit, pay EMIs regularly, Use your credit cards sparingly, The idea of a loan is a scary one, as on one side your attain your desire, at the cost of paying extra as interest, late fees, creates financial anxiety and the struggle to break even the income and expenses structure.
EMI comes monthly, but you are actually paying by the day!
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