EMI Planning: Smart Strategies to Manage Monthly Payments

Why EMI Planning Matters

Poor EMI planning can lead to financial stress and credit score damage. Here's how to manage effectively.

1. 50-30-20 Rule for EMI

Keep total EMIs below 40% of your monthly income. Ideally 30-35% is safe.

2. Emergency Fund

Maintain 6 months EMI amount as emergency fund for job loss or emergency.

3. Part Prepayment

Whenever you get bonus or extra income, make part prepayment to reduce principal.

4. Balance Transfer

If rates drop, transfer loan to lower interest bank to reduce EMI.