Want To Repay Your Personal Loan Faster & Save Money? 5 Essential Tips for Desi Borrowers

As personal loans become a go-to solution for managing big-ticket expenses like weddings, education, or medical needs, Indian borrowers are increasingly seeking ways to minimise the financial strain of interest payments. In 2025, repaying personal loans early not only reduces long-term costs but also strengthens one’s credit health and future borrowing capacity. Early repayment requires not just discipline, but tactical financial planning.

“Paying off a personal loan faster isn’t just about making timely EMIs—it’s about being strategic,” said Vikkas Goyal, founder of Rupee112, in a statement to Mint. He added that using bonuses, tax refunds or even modest extra payments can significantly reduce both interest burden and loan tenure.

Here are five practical strategies to speed up repayment and reduce financial pressure:

Make Extra Payments

Even a small amount—such as Rs 2,000 added monthly to your EMI—can shorten your loan tenure and lower the total interest paid. Regular prepayments chip away at the principal, which means interest is calculated on a lower amount over time.

Opt for Balance Transfers

Borrowers with high-interest loans should consider transferring their outstanding balance to another lender offering a lower rate. This option should be weighed carefully in consultation with a certified financial planner to ensure overall cost savings.

Use Windfalls Wisely

Bonuses, tax refunds, and monetary gifts can be used as lump-sum payments toward the loan’s principal. This accelerates repayment and curbs future interest outgo. The Reserve Bank of India has also encouraged such proactive financial behaviour by removing foreclosure penalties on floating rate loans.

Consolidate Multiple Debts

If managing several EMIs has become unmanageable, consolidating debts into a single lower-interest loan could be the solution. This simplifies repayments and may lower the interest rate overall—freeing up room for quicker repayment.

Negotiate with Your Lender

Communication is key. Borrowers with a good repayment record may be able to renegotiate terms with their lenders—potentially securing a reduced interest rate or restructured EMI schedule. As Mint notes, such negotiations are increasingly welcomed by lenders seeking to retain low-risk clients.

Regulatory Backing

The Reserve Bank of India (RBI) has implemented borrower-friendly norms, such as advising lenders not to impose foreclosure charges on floating-rate personal loans. These reforms aim to make debt repayment more flexible and transparent for individuals.

Ultimately, the best approach to early repayment is a combination of consistency, discipline and leveraging financial opportunities. These strategies, supported by sound regulatory practices and informed advice, can help Indian borrowers become debt-free faster and more efficiently.