A personal loan is a helpful option for meeting several needs that arise suddenly without warning. These may include everything from medical emergencies and sudden home repairs or renovations to last-minute wedding costs, higher education expenditure, buying gadgets/appliances, and even covering travel costs.

These loans are unsecured loans (not secured by any collateral/guarantee) and come with shorter tenures ranging from 2-5 years on average. They also come with competitive rates of interest and are comparatively easier to obtain than other loan types, with minimal documentation and paperwork required.

However, just because a personal loan can be quickly obtained to cover your needs in the short term, it does not mean that you can be irresponsible about its repayment. You should follow these tips for repaying your personal loan in the best possible manner. Make sure to organize your loan documents properly as well.

Follow these tips while repaying your personal loan

  • Set your priorities straight

No matter what, repaying your personal loan should be your first priority. Whenever you apply for the loan, make sure that you have worked out your monthly obligations in terms of the EMI payment.

This will help you prioritize repayment of the loan above everything else. It is only this approach that will help you clear off the loan without any delays or defaults.

If you cannot be sure about your financial scenario a few months or years down the line, create a separate kitty that can cover at least 2-3 months of EMIs for the personal loan. This will help you stay on track with your repayment plan.

  • Auto-debits always work

If you authorize the lender to automatically debit the personal loan EMI every month from your bank account, then it will help you avoid any defaults or lapses in repayment.

This will keep your credit score intact as well. Wherever possible, choose the auto-debit option on a fixed day each month. Keep at least a month’s EMI in advance in this account.

  • Consolidate other debt

If you have credit card debts and other liabilities, make sure that you consolidate them into a single personal loan if possible, in order to save on higher interest costs and improve your credit score. This will also help you stay on track towards repaying your loan in a disciplined manner in the future.

  • Choose a balance transfer if required

If you have a higher interest rate on your personal loan, then it automatically equates to higher EMIs which may be difficult to repay at times. If you find another offer from a lender which reduces the rate of interest and subsequently your EMIs, then you can choose a balance transfer accordingly. However, keep in mind that this may lead to your loan tenure going up. Take your decision after giving it ample consideration.

  • Try and clear off your loan faster

You can try accumulating some extra funds that you can later use to repay the personal loan. Do keep an eye out for foreclosure or prepayment charges on the personal loan app.

If it works out reasonably for you, then you can use that new bonus or surplus money to clear off the loan in quicker time, thereby giving your credit score a boost and helping you become debt-free in the bargain.

  • Keep tracking your loan details

Another thing that most people do not take seriously is the importance of periodically tracking their loan details. This will help you stay updated on the upcoming EMI payments, the amount which still remains outstanding, the interest component that is being deducted, and so on. Staying in the loop will automatically get you more committed towards repaying your personal loan.


These are some tips that you should keep in mind while repaying your personal loan. Before taking the loan, get an idea of the monthly EMI payable by using an online EMI calculator.

Work out this figure into your monthly budget and stick to the financial plan that you make for the next few months or years. Responsible and timely repayment will not only help you clear off your pending debts but also improve your credit score and history.

This will help you obtain loans at better rates from lenders in the future, especially when you wish to fulfill aspirations like buying a home or a car down the line.

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