What are the Importance and Benefits of Timely Loan Repayment

Finance experts believe that before you borrow a loan from a bank or NBFC, you should assess your ability to repay the amount in the given tenure. Because it is clearly understood that if you are borrowing a loan, you have to repay it, and if you don’t repay it in the given time, there are different drawbacks and consequences related to it. Today, you can easily avail a cash loan online with a personal loan app. And at the same time, they give you a decent time frame to pay back the loan that you borrowed. However, there is a reason why lenders insist on the timely repayment of loans. It is not just for their benefit but also for your credit and finance history.

While working our way through this article, we check for the time frames that a personal loan app provides its users for the repayment of loans. And we came across some popular apps like TrueBalance, CASHe, Dhani, PaySense, etc. We noticed that all of these online loan apps give the borrowers decent loan repayment tenure. For Example, TrueBalacne, one of the most popular instant loan apps in the market, processes your loan within 5  mins while offering you to repay the loan amount in a span of 2 to 3 months as per your convenience. So, if you don’t pay your loan on time, it has several consequences. However, if you are paying your loan instalment on time and you fully repay the loan in the given tenure, you also get a lot of benefits.

Importance and benefits of timely repayment of Loans:

It is important to pay your loan at the time as delaying the loan repayment may have a serious detrimental impact on your credit history and finances.

1.      Credit score

Your CIBIL score or credit score determines your creditworthiness which is a very important factor considered by lenders while lending you the loan amount. And timely repayment is a major factor that impacts your CIBIL Score. Therefore, a good CIBIL score can be maintained by timely repayment.

However, if you make a delay in repayment, your credit score will be impacted, leading to difficulties in borrowing money in the future.

Benefits of timely repayment: If you ensure timely repayment of your loans, you can easily maintain a good and healthy CIBIL score, which will allow you to maintain a good credit reputation and prove beneficial in the future. A score of more than 750 is considered good by the lenders while lending money.

2.      Save yourself from additional charges like late payment charges and other penalties

Late repayment of a loan other than impacting your credit score also makes you pay extra. In case of late repayment, the lender can impose a fine or penalties and levy extra charges on your loan. So, you will then have to pay your EMI + the penalty imposed on you for late payment.

Benefits of timely repayment: With timely repayment, you are saved from paying extra money that would have ended up burdening you financially.

3.      Prevents bad loan/credit condition

If you ensure that you are paying all the loan EMIs on time and you completely repay the loan in the given tenure, then you are making a good credit history. This, in turn, helps you get a loan easily in the future. On the other hand, if you do not pay the EMIs on time, you will be creating a bad loan condition in your credit history, resulting in lenders rejecting your loan application or charging high-interest rates.

Benefits of timely repayment: Lenders process your loans with ease and don’t charge you a high-interest rate.

4.      Loan top-ups

Your loan repayment behaviour matters a lot when it comes to availing different benefits from your lenders. For example, if you have a good repayment history, then your lender will not be reluctant to offer you benefits like loan top-ups.

Benefits of timely repayment: Your lender will not be reluctant to provide you additional benefits on your loans like tops ups or an instant cash loan, etc.In conclusion, you must assess your financial potential to repay a loan that you are borrowing to save yourself from landing in a bad financial position. Then, you can simply set up an auto-pay for online loan repayment to escape late payments. For the best online loan services, you can download the TrueBalance loan app from the Google Play Store.

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