You may often get multiple nudges before a repayment date. This usually applies when you have taken a loan or even swiped your credit card for some expenses. Now, there’s a pattern that you will often notice in this context. There is not one but multiple messages that you get from the bill payment app reminding you of the remaining due and the timeline. This may seem annoying but is often considered a repayment discipline technique that financial institutions have considered for years.
Yes, it almost disciplines you into thinking that you must pay your EMI on time to make sure that your credit history looks good or to remain in the good books of the lender.
In this guide, we will talk more about the importance of repayment discipline, especially in the context of bill reminders.
What Are the Behavioral Triggers That Drive Repayment?
If you were thinking that only financial calculations helped you maintain your repayment discipline, you are wrong. It is often driven by some behavioral triggers that are initiated by the bank itself. They are more like behavioral signals that involve the following:
- Routine Anchoring: You will feel more confident as a borrower if you repay your debts on time.
- Nudge Responsiveness: You may have clicked on multiple reminders for loan repayment on purpose which implies your intent to complete things on time.
- Limit Aspiration: Your timely payments also display your desire or interest for receiving more funds in the future.
- Internal Rewards: You also get motivated thinking that you will be free for the rest of the cycle if you pay on time.
- Stress Minimization: Tricky calls and app warnings won’t disturb you anymore which is another source of motivation for you.
- Social Identity: Financial responsibility is something that your family or loved ones expect from you, which also influences your behavior.
- Device Consistency: You will always indicate steady digital behavior with consistent usage of your device.
- Pattern Familiarity: The more cycles you complete, the easier it becomes for you to complete the loan.
Why Do Borrowers Misunderstand These Behavioral Triggers?
Some borrowers are completely consistent with their repayment cycles and do not wish to get any behavioral triggers. Those who have taken an instant loan may also be expecting to close the EMIs within a few months.
However, overconfidence is not good in this case because stress, peer pressure, emotional decisions, or digital behaviors may often weaken their repayment cycles. Borrowers often misunderstand behavioral triggers in the following ways:
I Don’t Need Reminders Because I Pay on Time
Reminders on messages, emails, or even on the bill payment app may annoy you if you have always made your payments on time. However, these reminders are simply sent to reinforce your routine and not to harass you in any other way.
Smaller EMIs Do Not Need Any Plans At All
You may think that small EMIs on instant loans may not be that important. However, there are chances that even these repayments can mess with your budget cycle in a certain month. This becomes quite stressful for many borrowers who may have taken multiple loans.
My Income Matters, Not My Behavior
Shifting behavior often affects loan approval limits, rates, and even trust. So, you are absolutely wrong in thinking that your behavior doesn’t matter when it comes to the repayment cycle for your existing or upcoming loan tenures.
How to Build A Stronger Repayment Motivation?
Repayment motivation is necessary to ensure you remain a loyal borrower and pay your EMIs on time. At times, it also strengthens your emotional stability, digital habits, and financial planning. That is why it is always important to build a stronger repayment motivation by following these steps:
- Repay Early, When Possible: You will get instant psychological relief and prevent anxiety if you repay your debts beforehand.
- Set Reminders: You can maintain some strong repayment patterns even during some busy weeks if you have reminders coming on time.
- Track Monthly Flows: You can reduce your repayment stress to a great extent if you understand your income-expense timing properly.
- Avoid App Browsing, Especially at Night: You should avoid scrolling these apps at all cost to avoid impulsive borrowing and distraction.
- Use a Single Primary Device: Your credit score will remain consistent only if you showcase stable behavior, even in terms of using a device.
- Plan Some EMI Buffers: Save as much as possible, even ₹400-₹700 a week will help you cover expenses in unexpected situations.
- Borrow Less Frequently: You can improve your discipline and reduce mental stress by taking some longer gaps between your borrowing cycles.
- Celebrate Discipline: Always acknowledge your good repayment patterns because it will encourage repeat behaviors in the future.
Final Thoughts on Bill Reminders
Banks and financial institutions send bill reminders to ensure you maintain your repayment discipline. Another reason is that these institutions also want to run their businesses without facing any losses or issues in the future. You will continue to get the in-app nudges, calls, or emails until your repayment date. The best thing to do here is to keep repaying your debts on time. This helps you in maintaining a discipline that will entrust you as their loyal borrower in the long run.
