Personal Loan

How to Manage EMI for a 20 Lakh Personal Loan?


It has become easy to apply for a loan. You can easily apply for a personal loan through your bank or a third-party financial institution. You can then pay off your loan through every monthly instalment (EMI). However, managing EMI for large principal amounts can be difficult. Here are some different ways you can manage personal loan EMI with ease.

Different ways to manage personal loan EMI

Research beforehand

You need to make sure you can repay the amount you have borrowed if you want a good personal loan EMI experience. Before applying for a loan, do proper research and make a detailed plan. Check your savings, income and future employment opportunities before selecting an EMI plan. You can use various online calculators to determine your loan repayment capacity. The calculators will also help you understand your ideal loan tenure.

Create savings for an emergency

To be financially secure, you should maintain a savings or emergency fund. If you have unexpected financial troubles, you can use these funds to pay personal loan EMI. Keeping a savings fund as an emergency net will ensure you do not miss your EMI date. Missing a date can make you a defaulter.

Add a co-applicant

You can apply for a personal loan with another family member or spouse. You can add the co-applicant to the personal loan EMI payment plan. It will reduce the repayment burden as the co-applicant can also make payments. However, you should check the applicant’s CIBIL score and income before adding another applicant. Both factors can affect the principal amount and interest rate offered.

Choose low-interest-rate loans

The most important part of a loan is the interest rate. It affects the personal loan EMI amount. You reduce your EMI when you have a lower rate of interest. It is beneficial to research interest rates beforehand. You should understand how the interest rate is calculated. This should be done before you accept the terms of the loan. You may be offered lower interest rates if you have a high CIBIL score and good credit history.

Reorganize your budget

Financial discipline is an important part of loan repayment. You have to adjust your personal loan EMI in your monthly income. After you have taken out a loan, create a list of all your expenses. From this, you can select which expenses are necessary or not. Reorganizing your budget around personal loan EMI can help you make regular payments.

Set reminders and automate

Many people forget to pay personal loan EMI before the due date if they have emergencies. Setting a reminder will help you make payments on time. On-time payments ensure you do not incur any fines. Set up reminders to make the EMI payment 2-3 days before the due date to ensure you do not miss the deadline. You can also ask your bank to set up a recurring EMI payment. Here, the money is automatically deducted from your account on or before the due date. 

Increase payment amounts

You can always increase the payment amount on personal loan EMI. For example, you can speak with the relationship manager and adjust the EMI if you have just received a salary raise. You can also ask to step up your EMI every quarter or year. Increasing the payment amount will help you repay the loan faster.


Refinancing is a smart decision if you are unsure about whether you will be able to pay your EMIs on time every month. You can reduce the personal loan EMI amount by refinancing. Refinancing is the process of repaying one loan with a newer loan. Most people choose this option if the new loan has better features, e.g., lower interest rate, longer tenure, etc. Refinancing may give you more time to pay back the loan. Personal loan EMI after refinancing may be lower.

Make repayment a priority

You boost your credit score every time you pay a personal loan EMI on time. Making loan repayment a priority is a smart way of managing a 20 lakh personal loan. Every month, first deduct and pay your EMI before other expenses. By making repayment a priority, you will avoid late payments.

Lump sum prepayment

Another effective method to pay off personal loan EMI is to use lump sums as prepayment. The tenure of your loan can decrease if you pay using the dividends you receive from your investments. For example, if you have a 1 lakh rupees bonus in a year, you can prepay for a personal loan EMI. This will decrease the tenure and reduce the amount you have to pay.

Pay extra EMI

Making an extra personal loan EMI payment each year can be difficult, but it does not mean you cannot try. Paying an extra EMI each year will help reduce the amount. Many employees receive bonuses during Diwali or Christmas. These can be used to make extra payments to the personal loan EMI.


Borrowing money has become very easy. Numerous banks and financial institutions will lend you money with affordable EMIs. However, you must read all the terms and conditions of the loan you are choosing.

For most people, getting a loan is the easy part. Managing loan repayment is difficult. Using the tips given above, you can easily manage personal loan EMI. Furthermore, the features of the loan also make a difference.

Go through all details of the loan thoroughly before you apply for the loan. Understanding your loan repayment capacity is the first step. The second step is managing your EMI payments properly.

If you’re ready to learn more about personal loans, visit Piramal Finance for more tips!