There are various types of personalities, mindsets and perspectives varying from individual to individual. And all this impacts someone’s financial life as well. Broadly, there are minimalist people and maximalist people. On the one hand, the minimalist financial approach assumes that less is more, with emphasis on keeping things simple and spending only on the necessities. While this approach is cost-effective, those who follow the opposite one, i.e. maximalist approach, often get caught in deep financial troubles. So here we provide financial tips for such maximalists to avail of an HDFC Personal Loan.
Create and follow a realistic and manageable budget first.
Even if you love spending and buying everything you like, you must know where to apply the brakes. Whether you follow a minimalistic approach towards your finances or a maximalist one, budgeting must form the core of your financial plan. Budgeting not only makes you financially disciplined but also inculcates the habit of saving before spending. It assists you in differentiating between your needs, wants and luxuries.
While making your monthly budget, make sure that it’s a realistic one, i.e. you would practically be able to follow it on a continuous basis. The first step towards saving is to build an emergency fund. This fund’s amount would only be used in times of financial exigencies, such as sudden job loss or severe illness. Make sure you build and maintain an emergency fund amounting to at least 3-6 times your monthly expenses. Then, as per your HDFC Personal Loan amount, interest rate and tenure, get to know your EMI and accordingly make adjustments to budget before submitting an application.
Avoid impulsive spending on your credit cards when getting ready for a personal loan.
As credit cards offer instant access to credit, many spenders often get caught in a debt trap upon careless usage. Whether credit cards lead you to a debt trap or prove beneficial to your financial health depends upon the way you handle them. Often, maximalists indulge in impulsive spending through their credit cards, which lands their finances in deep trouble. While using credit cards, avoid viewing them as an extra source of funds that can be spent carelessly. Since credit cards involve heavy interest rate charges, which may go as high as 49-50% p.a., make sure you use them diligently and pay your monthly credit card payments timely and in full. If used wisely and diligently, credit cards certainly boost your credit health by assisting in building a good credit score, along with various benefits such as cash backs, rewards, discounts etc. When you have control over credit card spending, you will have more discipline towards HDFC Personal Loan repayment as well, hence reducing chances of irregularities or default. And once your personal loan application is submitted to the bank, remember to keep checking your HDFC Personal Loan Application Status to stay updated whether it’s getting processed, approved or rejected.
Automate monthly bills and payments to avoid penalties
Automating monthly payment of your bills, HDFC Personal Loan EMIs, investments and credit cards help in making you more frugal. Your bank auto-debits the various payments from your bank account as and when the due date arrives. Doing so has twin benefits, firstly you won’t miss out or delay your payments and secondly, it enables you to follow a disciplined approach towards managing your finances each month. Whereas, in case you don’t provide standing instructions to your bank and continue managing your payments and investments manually, chances of financial indiscipline or payment default are always higher. Also, a lot of people tend to ignore the facility of checking their HDFC Personal Loan Application Status after applying for it. Ensure to utilize this facility to avoid endlessly waiting and instead yourself checking the status of your application.
Don’t make decisions based on others’ opinions.
Don’t make this mistake of taking financial decisions based upon hearsay or biased opinions. Even if you need advice, opt for a financial planner or advisor instead of forming an opinion based on family or friends’ views. The financial advisor would be the right source to anchor your investment decisions since he/she has the adequate skills and knowledge to guide you financially. Additionally, for investments such as mutual funds, few online financial marketplaces are offering automated advisory services which assist investors in building the right portfolio. You can visit these portals for assistance in creating and managing your investment portfolio. Whereas for those who are waiting for communication from the bank for their personal loan application, using the HDFC Personal Loan Application Status facility can help in staying up to date about approval or rejection of an application.
Don’t disturb your investments when planning for a personal loan.
In your bid to take an HDFC Personal Loan, don’t go all out to compromise on investment contributions. This will harm your financial health. Ensure to factor in your risk appetite, which is the ability of an investor to take a risk, with the degree of risk depending upon factors such as investor’s financial condition, existing liabilities, age, source and frequency of income, and a number of financial dependents. Remember to keep investing in line with your risk appetite. Usually, maximalists tend to impulsively invest and build a higher risk-oriented portfolio. This may result in huge losses as well, in case the market crashes and the investor urgently need those funds. Even if you have a greater or higher risk appetite based upon the above-mentioned factors, it’s wiser to build and maintain a balanced, i.e. moderate risk portfolio with earmarked investments.
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And since you would have an additional responsibility of repaying the personal loan after you found that it got accepted upon checking the HDFC Personal Loan Application Status, try maintaining a balanced portfolio to help during market ups and downs, instead of an aggressive one. Such a balanced portfolio generally includes investment in balanced mutual funds, which involves both debt funds (for short term goals) and equity funds (for medium to long term goals). At the same time, those looking to invest in low-risk instruments may opt for fixed deposits, savings or debt funds. Remember that having a risky portfolio during personal loan repayment can result in any market downturn harming your finances and even lead to irregularity or default in EMIs.
