Want a lower EMI For a Personal Loan? Try these 4 tips

Reviewed by: Sudesh Shetty

  • Updated on: 19 Jan 2024
  • Published on: 16 Jan 2024
Want a lower EMI For a Personal Loan? Try these 4 tips

The EMI for personal loan repayment is a figure that can either put a strain on your finances or help you repay stress-free. Since it has a large impact on your monthly budget, choosing the lowest possible EMI can be helpful. You can then have funds at hand to address other goals and obligations as well as to build an emergency corpus. 

While you can check your personal loan instalment beforehand using an EMI calculator, paying a minimal amount hinges on certain factors you can watch for. 

4 Effective Tips On How To Reduce Your Personal Loan EMI

Lowering your monthly repayment amount and paying off your loan comfortably is easy. Try out these strategies. 

Lower Your Loan Amount

Borrowing less is the easiest way to reduce your EMIs as this amount is based on your loan’s principal. See the table below to check out how the EMI reduces when the loan amount varies while keeping the interest and tenure the same:

Loan amount Interest Tenure EMIs
₹2,29,00014%12 months₹20,561
₹1,82,00014%12 months₹16,341
₹1,36,00014%12 months₹12,211

Apply the same logic to your existing loan by lowering your loan amount with partial prepayments. If you have surplus funds and are wondering, ‘Can I reduce my personal loan EMI?’, the answer is yes! 

You can chip away at the loan’s principal by paying more than your monthly instalment. This will reduce your subsequent instalments and also help you reduce the interest you pay. Do consider the charges and conditions that financial companies may have in place before you plan prepayment. 

Opt for a Balance Transfer

Apart from the loan amount, the interest rate also affects your EMI. By transferring your remaining loan to another financial company, you can enjoy lower rate. Take a look at how EMIs are affected when only in the rate reduces and the tenure and principal is the same:

Loan amount Interest Tenure EMIs
₹2,00,00020%12 months₹18,527
₹2,00,00016%12 months₹18,146
₹2,00,00014%12 months₹17,957
₹2,00,00012%12 months₹17,770

Before you go ahead and transfer your personal loan balance, consider the new lender’s charges and terms:

  • Processing fees
  • Prepayment charges
  • New tenure

This way, you can ensure that transferring the balance to a new lender is the right decision. 

Ask for a Longer Tenure

Increasing the repayment timeline also helps you reduce your instalment. See how the EMI changes when the tenure changes, keeping all else constant: 

Loan amount Interest Tenure EMIs
₹2,30,00014%3 months₹78,462
₹2,30,00014%9 months₹27,069
₹2,30,00014%18 months₹14,240
₹2,30,00014%36 months ₹7,861

You can ask your existing lender to extend the timeline or switch to a new lender to decrease your EMI. 

Avoid Missing EMI Due Dates

Paying your EMIs after the due date adds to your liability, as you will have to pay penalties for late payments. Delayed payments also affect your creditworthiness, which can make future borrowings more expensive. 

It can also have a negative impact on your request for a lower rate or a longer tenure. So, ensure you pay every EMI for a personal loan on time. Set up auto payments or reminders to avoid missing the due date.  

The above tips can help reduce the EMI amount for your existing personal loan. But if you want to have manageable EMIs from the start, use an EMI calculator before applying for an instant loan

This simple online tool gives you an estimate of your repayment instalment based on your loan terms. You can adjust the loan amount and tenure to reach a suitable combination where your EMI fits your budget. Learning how to manage loan EMI for new or ongoing personal loans is key to keeping repayment within your budget. 

To do this with ease, you can apply for a Fibe Personal Loan. We offer funding of up to ₹5 lakhs with rates starting at just 2% per month and tenures going up to 36 months. What’s more, you can prepay at no charge! 

Simply use the Fibe EMI calculator to know your ideal tenure and amount for stress-free repayment. Apply in just a few clicks by downloading our Personal Loan App or registering on our website.

FAQs on Lowering Your EMI

Can I reduce my personal loan EMI amount?

With the right financial planning and making partial prepayments, you can easily reduce your personal loan EMIs. In addition, if you have a good credit score, you can request your lender increase your tenure for a more suitable EMI. 

Does prepayment reduce EMI?

Absolutely. Making prepayments reduces the principal amount, which can help reduce your personal loan EMIs. 

Is it possible to reduce EMI or tenure?

Yes. You can request your lender to reduce your loan tenure. However, it is important to understand that reducing your tenure will increase your EMI for a personal loan. You can use an EMI calculator to know the ideal tenure and ensure the instalment amount fits your budget.

What happens if I pay extra EMI for a personal loan?

When you pay more than the minimum EMI amount, the lender directs the additional funds towards the principal amount. Thus, paying extra reduces your outstanding amount and your future EMIs.


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