Personal loans can be incredibly helpful during emergencies or for managing big expenses like medical bills, education costs, home repairs, or even weddings. But once the loan is approved and the EMIs begin, the monthly burden starts to feel heavy. Many people eventually ask the same question:
“How can I close my personal loan faster?”
Closing a loan early not only gives you mental peace but also saves a lot of money in interest charges. The good news is that with the right strategy, planning, and discipline, you can finish your personal loan sooner than expected.
In this article, we’ll explore simple, practical, and human-friendly tips that can help you pay off your loan faster without stressing your budget.
Why Should You Close Your Personal Loan Early?
Before we jump into the tips, let’s understand why fast loan closure is beneficial.
1. You Save Money on Interest
Personal loans generally come with higher interest rates. The longer you take to repay, the more interest you pay. Paying early reduces this cost.
2. You Improve Your Credit Score
Closing loans early shows good financial discipline, which helps improve your credit score (or keeps it strong).
3. You Reduce Monthly Stress
Imagine a month without EMI deductions—it gives financial comfort and freedom.
4. You Can Focus on Other Goals
Whether it’s starting a business, buying a car, or saving for the future, a closed loan means more opportunities.
Practical Tips to Close Your Personal Loan Faster
Here are the best methods that people have used successfully to speed up their loan repayment:
1. Make Part-Payments Whenever Possible
Part-payment means paying an extra amount (apart from your EMI) towards the principal balance. Even small part-payments—like $50, $100, or PKR 5,000, PKR 10,000—can reduce the principal significantly.
Why it works:
Interest is calculated on the remaining principal.
The smaller the principal → the less interest you pay → the faster the loan ends.
Best times for part-payment:
Salary bonuses
Freelance income
Commission or incentives
Tax refunds
Eidi or gift money
Savings from cutting expenses
Even one part-payment a year can reduce your tenure by several months.
2. Increase Your EMI Amount
Most banks allow you to increase your EMI if your income has improved. Even a small increase can have a surprising impact.
Example:
If your EMI is 10,000 and you increase it to 12,000:
That extra 2,000 per month directly reduces your principal and shortens your loan.
Benefits:
Faster loan closure
Less interest paid
Builds financial discipline
If your financial situation is stable, consider increasing your EMI.
3. Choose Shorter Loan Tenure When Possible
When taking the loan, many people choose a long tenure because it gives smaller EMIs. But long tenures mean higher interest.
Tip:
If you can afford it, choose a shorter tenure.
You pay more monthly, but you save big on interest.
Example:
A 3-year loan costs much less in interest than a 5-year loan—even if the EMI feels slightly higher.
4. Cut Unnecessary Expenses and Redirect Savings
Small lifestyle adjustments can create surprising savings. For example:
Eating home-cooked meals instead of frequent dining out
Reducing unnecessary subscriptions
Avoiding impulse shopping
Switching to budget alternatives for groceries or utilities
Even if you save PKR 3,000–5,000 a month, you can use that amount as a part-payment.
Think of it this way:
The more you save → the more you pay towards your loan → the faster you finish it.
5. Avoid Taking Multiple Loans Together
Many people fall into the “loan trap” by taking another loan while repaying an existing one. This increases financial pressure and slows down repayment.
Better approach:
Focus on clearing your current personal loan before taking any new financial commitment.
Why:
Your EMI load stays manageable
You avoid late payments
You maintain a good credit score
You finish the loan faster
Avoid debt piling up—you’ll thank yourself later.
6. Use Windfall Money Wisely
Windfall money means unexpected income. It could be:
A cash gift
Inheritance
Prize money
A sudden business profit
Selling an old item or gadget
Many people use this money for shopping or entertainment. But using it for part-payment can shorten your loan tenure drastically.
Pro Tip:
Whenever you get unexpected money, put at least 50% of it towards your loan.
7. Avoid Missing or Delaying EMIs
Even one missed EMI can make your financial burden worse:
You get charged penalty fees
Your interest increases
Your credit score drops
Your loan takes longer to finish
Set reminders, use auto-debit options, and ensure your bank account always has enough balance.
Rule:
Never miss EMIs.
Never delay EMIs.
This habit alone can save you a lot of trouble.
8. Refinance or Balance Transfer Your Loan
If you find a lender offering a lower interest rate, you can transfer your existing loan to them.
Benefits:
Lower EMI
Lower interest cost
Faster loan repayment
But be careful—always check processing fees, transfer charges, and terms before switching.
9. Create a Monthly Loan Repayment Budget
Budgeting helps you see where your money goes.
List your:
Income
EMIs
Utilities
Groceries
Savings
Extra expenses
This clarity helps you decide how much additional money you can put toward your loan.
Tip:
Stick to your budget for at least 6 months, and you’ll see real progress.
Final Thoughts: Finish Your Loan Faster With Smart Planning
Closing your personal loan early is not about earning more—it’s about planning better. Even small actions like increasing your EMI, avoiding unnecessary expenses, and making part-payments can shorten your loan by months or even years.
A loan should help you, not stress you. With discipline and consistency, you can get debt-free faster and enjoy financial freedom.
Remember:
Every extra payment counts.
Every saved rupee counts.
Every smart decision counts.
You can finish your loan sooner than you think—just start taking small steps today.