How to Pay Extra EMI for Personal Loan?

I was planning to take out a personal loan, but before that, I wanted to know if I could pay more EMI. To know about this I reached out to my uncle, who is a retired SBI manager. I asked him can we pay more than EMI in personal loan. He told me that we can do that but that is only possible before taking up the loan. 

Can I Pay More than EMI for Personal Loan?

My uncle told me about four ways through which I can pay extra EMI, and those are

Reduces Loan Principal

My uncle told me that paying extra reduces the outstanding loan amount, which in turn reduces the interest that I owe the bank.

Extra EMI Payments

Next, he told me that some lenders allow their customers to pay extra EMI each year and that is free of any charges.

Lump Sum Payments

He also told me that I can make a larger one-time payments to further reduce the principal amount of my loan

Early Loan Repayment

The final way he told me about was extra payments. He said that by making extra payments I can pay off the loan faster, saving money on interest.

And that’s all my uncle told me when I asked him can I pay more than my EMI in personal loan. I hope this helps.

I took a personal loan last year, and after paying a few months of EMI, I wanted to pay some extra amount with that. As I wasn’t aware whether it was possible or not, I asked a friend about how to pay extra EMI for personal loan. He told me that, it was possible only if bank allows it. 

Can I Pay Extra EMI for Personal Loan?

• My friend told me that few banks allow you to pay two to five times your EMI value at least once a year or more. And he told me to check with my bank to know if this facility is available or not. 

• He told me that paying extra EMI would reduce the outstanding and principal amount of the loan. He also said that this would reduce the interest burden and help me repay the loan faster. 

• Apart from that, he also mentioned that I can make a Lump sum amount payment. This will help in reducing the interest that would have accumulated over the loan tenure. 

• He advised me to make lump sum payments during the initial years of the loan when the principal outstanding is high. According to him, this can have a significant impact on reducing the loan tenure and the overall interest cost.

And that is all that he told me about how to pay extra EMI for personal loan. I hope this is helpful to you.