How to come out from Personal Loan?

POSTED BY Vishal Sharma ON January 7, 2013 11:59 pm COMMENTS (7)

I have taken 2 personal loans last year for some personal reason. Loan amount 200000/- and 320000/- @ 15.5% for 3 and 5 yrs tenure, Paying aroung 14000/- EMI. Now I want to come our from this loan amount ASAP. Is there anyway I can come out from this loan withing 1 year. I dont have money to pay off in one shot. 1/3 of my salary is going EMI.

I know that I have done mistake of taking Personal loan. But I was not having any option that time. Please suggest some solution.

7 replies on this article “How to come out from Personal Loan?”

  1. Credexpert says:

    Dear Mr.Sharma,

    Unfortunately, you would not be able to close the loan in 1 year as we assume that you cash flows do not allow you to do so. You can always exercise the option of availing some funds through personal borrowings that are interest free or with low interest and repay the Personal loan immediately. Also, repay the loan which has the higher EMI amount 1st and then move towards repaying the other loan.

    The next option would be to sell off/ liquidate some of your investments and pay off this loan as the interest rates here are high and paying them first should be your priority.

    If none of the options suggested above work then, stay with the current repayment pattern but ensure that you do not avail any other loans that have the potential to mess your debt further.

    Also read the article “Personal loans easy to get, but come at high” courtesy Economic Times published on 3rd January 2013 to understand how such loans should be taken only in times of crisis.


  2. Dear Vishal, from the given info, one thing is clear, you are going in right direction. Please check with your PL provider for partial prepayments. If allowed, please liquidate your MF & RDs right now & pay off that much amount into 2L Rs. PL. If partial pre[payment is not allowed & only full prepayment is allowed, please check for cash help from friends & relatives to close down that 2L Rs. loan right now. Once this loan is over, please divert your EMIs to pay off your friends & relatives. Please do not continue that RD of 2K when you are paying 15-16% & earning merely 8%. Yes you can use these RDs to create prepayment corpus. Even increase a bit from your savings.



  3. Thanks All for your quick response.

    Ashal – Regarding my assets I dont have much investment. I have SBI Magnum MF – 45K (currrent value 52K) partially I can withdraw. 2 RD – 2K per month (mature on Dec 2013).

    So overall I dont have anything for liquidation. I will try to arrange some case from family and freinds to payoff 1 loan.

  4. Dear Vishal, to pay off your loan in one year time frame, You simply need around 5.5L Rs. Please share what assets & investments do you have as on date which can be liquidated to pay off at least one if not both loans.



  5. High cost loans should be gotten rid of first before investing. Every additional rupee you can save and now diverting to other investments like MFs and FDs must be stopped and directed to close the loan. If you hold on to Equity you can also take loan against securities which is a much lower at 12-12.5% (versus personal loans) and close the personal loan. If you have FDs see if you can break them to pay the loan.

  6. kkk says:

    In the absence of anything other avenue, bring some frugality to living. Instead of living with 28K per month (your 2/3 of salary) live with 21 K and save the other 7K. Part pay one loan (higher rate one if they have different rates) regularly every month if your bank allows that or keep the money in an RD for a duration enough to prepay one loan (if partpay is not allowed). Then repeat for the other loan. My calculation say you can come out of loans in 2 years if you think your emi is 21K instead of 14K. Increase/decrease that 21K according to your conveniance. Take the part payment or pre payment penalties into consideration when making the plan.

    If you have other things like Gold, car etc and dont want to sell atleast try to get a lower interest loan by keeping them as security and prepay personal loans. Follow above procedure to clear the new loan more quickly.

  7. Is there anyway I can come out from this loan withing 1 year

    If you have assets like gold. car, other investments? Sell them and pay off as much of the loan as possible.

    Check out the possibility of getting a loan from your PF account. This is not ideal but getting out of bad debt is priority

    You can try out the option of borrowing from friends or relatives to pay off this debt but this is a great option as you run the risk of straining your relationship permanently. Still worth a shot if you can repay on time

    After this if you still have outstanding loan left, consolidate your personal loans: transfer them to a single lender so that your total EMI is reduced.

    see websites like

    Get a second job or do some side business to cover your EMI or pay off the loan down the line

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