I’m considering a Rs 10 lakh personal loan — What’s the smartest way to manage EMIs, stay debt-free?

Hi, I’m 28, soon to be engaged, with no personal savings yet. I’ve helped clear family debts, recover gold, and buy household items. Marriage is planned Jan/Feb in Chennai with ~800 guests; expected expenses from my side are ₹17 lakh (including a ₹5 lakh chain). My father can contribute ₹5 lakh, aunt ₹2 lakh. Considering a ₹10 lakh loan, I plan to allocate ₹40K/month toward repayment, ₹10K to family, rest for household. How long would it take to repay ₹10 lakh at standard bank rates, and can interest be reduced? Seeking advice.

Advice by Akhil Rathi, Head – Financial Advisory at 1 Finance

This is the important stage of life, and it directly impacts your cashflows. You have estimated wedding expenses of around ₹17 lakh, but it is advisable to keep a 10–15% buffer as last-minute changes and inflation can increase the overall cost. With your father and aunt contributing ₹7 lakh, the balance requirement of around ₹10 lakh through a loan seems reasonable. At current personal loan rates of 11–14%, and with your plan of paying ₹40,000 per month as EMI, the loan can be cleared in about 2.5–3 years. It is better not to stretch the repayment beyond this period so that you can start focusing on savings and investments after marriage.

For reducing interest, your credit score will play a major role. If your score is above 750, you can negotiate with banks for better rates. In case you don’t yet have a score, you may start by taking a credit card and repaying on time to build it. Additionally, prepaying part of the loan whenever you get bonuses or extra income will reduce the interest burden. Keeping wedding expenses within control and avoiding overspending will ensure financial stability as you move into this new phase of life.

Smart loan management

Managing a loan effectively is key to maintaining healthy finances, especially when balancing multiple responsibilities or major life events. Before taking a loan, clearly assess your repayment capacity—ideally, your total EMIs should not exceed 30–40% of your monthly income. Always compare interest rates across lenders, as even a small difference of 1–2% can save you thousands over time.

Opt for shorter tenures when possible, as this reduces total interest outflow, though monthly EMIs will be higher. If your cash flow allows, aim to repay within 2–3 years to remain financially flexible. Maintaining a credit score above 750 can help you secure lower interest rates, so pay your EMIs and credit card bills on time.

To reduce the burden further, consider making partial prepayments whenever you receive bonuses or additional income— this directly cuts down interest and shortens your loan term. Avoid over-borrowing; it’s better to keep a small buffer for emergencies rather than rely entirely on debt.

Finally, plan your budget around essential expenses and stay disciplined with savings. Smart loan management isn’t just about repayment—it’s about building long-term financial confidence while avoiding unnecessary stress from debt.