Personal loans are useful for times when you urgently need money. They are usually easy to get approved, and have flexible terms, but high interest could result in a larger, sometimes unmanageable, monthly EMI that can be tough for some borrowers. Luckily, with planning and some decisions on your behalf, you can fit your EMI into your budget and manage your loan.

Here are 5 helpful ways to decrease your monthly repayment and improve your financial life.

Formally extend your Loan Tenure
One of the easiest and effective ways to lower your EMI is to formally extend the tenure of the loan. By increasing the amount of time to pay back the loan, the loan amount can be spread over longer, decreasing your cash flow. If you extend the tenure, the total interest paid over the life of the loan may typically increase…so consider the trade off when making your budget. You will benefit from extending the loan tenure if you more typically prioritize short term cash flow instead of longer term costs.

Make Use of Windfalls for Partial Prepayments
Unexpected financial windfalls like work bonuses, tax refunds or gifts of cash are a great time to pay down any portion of your loan’s principal. When you make a funded partial prepayment, you reduce the amount owed on the loan, which could potentially reduce your EMI or reduce the tenure (amount of time remaining). Most lenders (SBI, Axis Bank, Bajaj Finance) allow prepayments provided a period has passed since the original loan was made, most lenders will not charge any fees for prepayments (if they are allowed). You will want to check your prepayment regulations so that you maximize your savings.

Consider a Balance Transfer to Pursue Lower Rates
If one financial institution is providing a better rate of interest, you may want to consider doing a balance transfer to the new financial institution. Balance transfers can have a significant reduction in EMI if you utilize a better loan term with the new lender. Just be sure to verify if the current loan has an associated costs to do with the current lender (processing fees, foreclosure costs, etc.) that will wipe out the savings when transferring banks. As well, comparing bank savings offers is important (Kotak Mahindra, NBFC, etc.) so that you find the best financial deal.

Consider A Step-down EMI Structure
Some lenders offer flexible EMI options such as step-down EMI where you pay higher amounts at the beginning and reduced amounts as the loan matures. Such an option will work well if you expect your income or expenses to reduce in the future – for example, after paying off other debts. Many banks (like ICICI or HDFC) offer such schemes where the repayment schedule aligns best with your financial journey.

Increase Your Credit Score for Better Terms
If you have strong credit history (more than 750) the lender might offer you better loan terms and lower interest rates. You can improve your credit score and of course, a strong credit profile has many advantages – timely bill payments, lowering credit tasks, and avoiding taking on any loan unnecessarily will all help to better your financial profile before you apply for a loan or negotiate EMIs.

Also Read: Why Your Income Tax Refund Is Delayed In 2025: 6 Common Reasons

Implementing these solutions could shave a lot of value off personal loan EMIs for you, giving you more money to put toward your priorities. You should always assess further where you would like to be financially, and work with your lender to agree a route which meets your areas of financial concern. With time, diligence, and planning you can make loan repayments an easy and manageable part of your financial journey.

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