Yes, you can pay more than the EMI amount and it can have several benefits. Here's what you need to know about making extra payments towards your personal loan:

  • Decrease in Principal and Interest: You can reduce the outstanding principal balance of your loan. As a result, the overall interest burden decreases over the loan tenure, helping you to repay the loan faster.
  • Extra EMI Option: Some lenders allow borrowers to pay one additional EMI each year without any charges. This method is an effective way to reduce the loan tenure and lower the total interest cost. 
  • Lump Sum Payments: Apart from the extra EMI option, borrowers can also make lump sum payments towards their loan accounts. For instance, if you receive a bonus, you can use that amount to partially repay your loan, even if it incurs a nominal foreclosure charge. By doing so, you save on the interest that would have accumulated over the loan tenure.
  • Early Loan Repayment: Making extra payments towards your personal loan allows you to pay off the borrowed amount sooner and become debt-free. This is especially beneficial when there are still a significant number of EMIs remaining. Example: By making a lump sum payment, such as Rs. 1 lakh, after three years on a Rs. 50 lakh loan at 9% for 15-year tenure, you will be able to reduce Rs. 1.9 lakh as interest charges and pay off the loan five months sooner.
  • Timing of Lump Sum Payments: It is advisable to make lump sum payments during the initial years of the loan when the principal outstanding is high. This can have a greater impact on reducing the loan tenure and the overall interest cost.
  • Before making any extra payments, review your loan agreement and understand their specific policies and any applicable charges for making additional payments. 


Paying more than your EMI in a personal loan is a viable option that can lead to significant benefits. Whether it's through an additional EMI or lump sum payment, reducing the outstanding principal balance helps you save on interest charges and shorten the loan tenure. However, it's important to assess your financial situation and choose an approach that aligns with your budget and goals.


Additional Reading : Personal loan EMI calculator