How do I maintain good standing during the loan term?

Maintaining good standing throughout your loan term is very important for your financial health and future borrowing prospects in India. Staying disciplined with repayments not only protects your credit score but also helps you with avoiding late fees and unnecessary stress. Here are steps to make sure you stay on track:

• Pay your EMIs on time. Set up auto-debit instructions or regular reminders so you never miss a payment. Timely payment is the foundation of a good credit record.
• Monitor your bank account balance. Always ensure there are enough funds available for EMI deductions, especially around the due date.
• Create a realistic budget. Factor your EMI into your monthly expenses and cut back on discretionary spending if needed. Prioritise your loan repayment over non-essential purchases.
• Avoid taking on extra debt. Adding more loans or credit cards can strain your repayment capacity and increase the risk of default.
• Communicate with your lender. If you foresee any issue in making payments, inform your lender early. Many lenders are open to restructuring your loan or offering temporary relief if you’re proactive.
• Check your loan statements regularly. Watch for discrepancies or unexpected charges and address them quickly.
• Maintain a healthy credit score. Manage all your credit obligations responsibly, including other loans and credit cards.

By following these practices, you can avoid penalties, maintain a positive credit history as well as improve your eligibility for future loans. Responsible management during the loan term ensures financial stability and peace of mind.