Personal Loan

Smart ways to pay your personal loan faster and save on interest

Key Takeaways

Longer tenures reduce personal loan EMI but increase the total interest amount
Part-payments and an optimum EMI amount are key to saving money on borrowing costs
It is important to enquire about foreclosure and EMI step-ups before applying for an unsecured loan
IDFC FIRST Bank FIRSTmoney Personal Loan offers flexible tenure and zero foreclosure charges for easy repayment

14 May 2026 by Team FinFIRST

The longer you take to repay your loan, the more interest you will have to pay over the original borrowed sum. However, with a smart, balanced repayment strategy, you can not only reduce the interest you pay but also be debt-free well before the loan due date.

Here are some repayment strategies you can implement to pay off your unsecured loan early.

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How to balance interest cost and EMI burden?

One of the first things you need to decide while applying for a personal loan is the Equated Monthly Instalment (EMI) you can afford. The EMI amount you choose determines how much interest you end up paying over the loan tenure.

A higher EMI amount means shorter tenure and lower interest cost

Lower EMI amount means a longer tenure and a higher interest cost

As a borrower, choosing a low and comfortable EMI results in a significant increase in the total repayment amount.

Example: Let’s assume that you have borrowed ₹1,00,000 with the IDFC FIRST Bank FIRSTmoney personal loan. You get the lowest interest rate of 9.99% per annum. Have a look at how your total repayment amount increases as you stretch the repayment tenure to lower your EMI amount.

Tenure	EMI (Approx.)	Total interest paid	Total amount repaid
12 months	₹8,791	₹5,492	₹1,05,492
24 months	₹4,614	₹10,736	₹1,10,736
36 months	₹3,226	₹16,136	₹1,16,136

As the above example shows, when you increase the tenure of your personal loan, you reduce your EMI but significantly increase the total interest payable.

How to repay a personal loan faster?

There are a few simple yet effective tips to ensure that you repay your personal loan faster.

Choose a shorter tenure:

It may not be affordable to choose the shortest tenure, as it increases the monthly EMI. However, try to choose a relatively shorter tenure and a higher EMI rather than the lowest EMI by default. In the case of IDFC FIRST Bank’s FIRSTmoney personal loan, the shortest tenure you can choose is 9 months.

EMI step-ups:

Enquire with the lender if they allow EMI step-ups. As you increase your EMI amount as your income increases, your interest cost will reduce, and you won’t feel any pressure on your finances as well.

Foreclose when possible:

Foreclosing a loan early helps you avoid interest payments that aren’t yet due. IDFC FIRST Bank’s FIRSTmoney personal loan allows for easy foreclosure via the mobile banking app. Moreover, you have to pay zero foreclosure charges, meaning that you can pay off your loan any time you want without any additional fees.

Here’s a comparison between the strategies you can use to repay your personal loan.

Strategy	EMI burden	Interest paid	Loan closure speed	Overall benefit
Long tenure (Low EMI)	Low	High	Slow	Convenient but expensive
Short tenure (High EMI)	High	Low	Fast	Cost-efficient
EMI step-up	Gradual	Reduced	Faster	Income-aligned repayment
Early foreclosure	One-time	Minimal	Immediate	Maximum savings

How to plan your personal loan repayment smartly?

Repayment has to be a balance between an easy EMI amount and the shortest tenure. In unsecured loans, a comfortable EMI may seem convenient, but it will result in heavier borrowing costs. At the same time, choosing a short tenure can result in financial stress each month due to high EMI payments. Therefore, you should try to:

Aim to keep your EMIs below 30%-40% of your monthly income

Identify your future income growth, be it a salary hike, bonus, alternate income or a maturing investment, and use them, if possible, to foreclose your loan

Maintain a separate fund which you can delve into for stepping up your EMI amounts in future

Compare different EMI scenarios using a personal loan EMI calculator

How to repay smarter with IDFC FIRST Bank FIRSTmoney personal loan?

IDFC FIRST Bank FIRSTmoney Personal loan is designed to be flexible. You can choose your own tenure based on your repayment capacity. This helps you to manage your debt more efficiently without putting you into a financially uncomfortable situation.

Other benefits of FIRSTmoney include:

Loan amounts between ₹50,000 to ₹15 lakhs (based on eligibility)

Competitive interest rates starting at 9.99% p.a.

Zero foreclosure charges, allowing you to close your loan at any time

Flexibility when it comes to choosing the loan tenure (9 to 60 months), and EMI date (3rd to 8th of a month)

Final thoughts

Your unsecured loan is a powerful tool that can meet your important financial needs. With a smart repayment strategy, you can repay your personal loan comfortably, and without incurring too much borrowing cost. Check your personal loan eligibility for FIRSTmoney by IDFC FIRST Bank today!

Frequently Asked Questions

Can I reduce interest cost by paying my EMI before the due date?

Generally, EMI dates are fixed. However, you can make a part payment or foreclosure to reduce your interest costs. In case of FIRSTmoney personal loan, you can foreclose your loan whenever you want without any foreclosure charges.

Should I part-pay my loan?

You can compare the personal loan interest rate with the expected rate of return from savings or investments. If the loan interest rate is higher, it makes sense to pay off the loan rather than save. However, do consider the foreclosure charges, if any, before you make your decision. If the foreclosure charges are adding to your bill rather than reducing your overall cost, you might prefer to just pay off your loan normally. IDFC FIRST Bank’s FIRSTmoney personal loan offers zero foreclosure charges.

How does inflation affect loan repayment?

Your EMI amount remains fixed over the loan tenure. This means that as inflation rises, the actual value of the EMI decreases, making it a less financial burden for you in future years.

What is the typical personal loan processing fee?

The personal loan processing fee can generally range around 3.5%. However, it varies from lender to lender. FIRSTmoney by IDFC FIRST Bank offers a zero processing fee on select loan amounts.

What is the CIBIL score required for a personal loan?

A CIBIL score of 750 is considered ideal for loan approval. With FIRSTmoney by IDFC FIRST Bank, salaried employees need a CIBIL score of just 710+ and self-employed individuals need a CIBIL score of 760+ to apply.

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.

The features, benefits and offers mentioned in the article are applicable as on the day of publication of this blog and is subject to change without notice. The contents herein are also subject to other product specific terms and conditions and any third party terms and conditions, as applicable. Please refer our website www.idfcfirst.bank.in for latest updates.