How can I reduce the overall interest paid on a personal loan?

You can reduce the total interest paid on a personal loan with a few smart steps. First, improve your credit score before applying. A higher score can help you get a lower interest rate. Choose the shortest tenure you can afford. Shorter loans mean higher EMIs, but you pay less interest overall. If you get a bonus or extra income, make part-prepayments towards your loan. This reduces the principal and cuts down future interest. Some lenders let you to prepay or foreclose the loan early.

Check if there are any prepayment penalties before doing this. Compare different loan offers from different lenders to find the lowest starting interest rate and best terms. Negotiate if you have a strong financial profile. Keep your debt-to-income ratio low, as lenders may offer better rates if you’re not already heavily in debt. Avoid missing payments, as late fees and penal interest increase your costs. By following these steps—improving your score, choosing a shorter tenure, making prepayments, and comparing offers—you can save a significant amount on interest and become debt-free faster.

Always review your loan statements and keep track of your outstanding balance. Setting up automatic payments can help you avoid missed EMIs and late charges. Staying organised and proactive about your loan will help you save more and manage your finances efficiently throughout the repayment period.