How often should I review my personal loan terms?

It is always wise to review your personal loan terms regularly and not just at the time of signing the agreement. Circumstances and financial markets can change and staying updated on your loan’s terms ensures you remain in control of your repayment strategy and overall financial health.

Times to review your personal loan terms include:

• When you receive your loan statement or annual summary: This is an ideal moment to check for any changes in interest rates, fees or repayment schedules. It also helps you track your outstanding balance and ensure all payments are correctly recorded.
• If your financial situation changes: Significant changes in income or expenses, for example: a new job, job loss, or major life event, should prompt a review. This helps you assess whether your current EMI is manageable or if you need to consider restructuring options.
• When considering prepayment or restructuring: If you are planning to prepay your loan, refinance or negotiate new terms, it’s essential to revisit your agreement. Check for prepayment penalties, processing fees, or any clauses that could affect your decision.
• When market interest rates fluctuate: For loans with floating interest rates, changes in the market can impact your EMI. Reviewing your terms when rates shift ensures you are prepared for any increase or decrease in your monthly outgo.
• If you receive lender notifications: Any communication from your lender regarding updates to terms, charges or policies should prompt a review.

Regular reviews help you avoid missed EMIs, identify opportunities to save on interest, and stay aligned with your financial goals.