How to Repay Personal Loan Responsibly with a Low Salary


Personal loans can be a boon during times of financial need, offering a quick solution to financial issues. However, managing repayment of personal loan especially on a low salary can be a critical task. But you don’t need to worry, because with some careful planning and responsible financial habits can help in repaying a personal loan with a modest income is entirely feasible.

  1. Understand Your Loan Terms:

Understand the loan terms and conditions before signing the loan agreement. You must have clarity of all the important points, such as the interest rate, processing fee, late fee, monthly installment, and total repayment amount including interest. Having a clear understanding of these things will help you repay the loan smoothly.

  1. Create a Realistic Budget:

Assess your monthly income and list down all your necessary expenses like rent, utilities, groceries, and transportation. Once you have a clear picture of your financial inflows and outflows, allocate a specific portion of your income towards loan repayment. Be realistic – allocate an amount that you can comfortably pay without compromising your essential needs.

  1. Minimize Unnecessary Expenses:

Cutting down on non-essential expenses can free up funds for loan repayment. Evaluate your lifestyle choices and identify areas where you can save, such as dining out less frequently, cancelling unused subscriptions, buying unnecessary things or opting for cost-effective alternatives. Having money management knowledge can boost your financial life.

  1. Negotiate with Lenders:

Communicate with your lender in case of any difficulties during the loan repayment. Some lenders might be willing to restructure your loan or offer a temporary grace period, allowing you some breathing room without defaulting on your payments.

  1. Side Hustles and Part-Time Work:

If your income is lower than your expenses, you may think about part-time work to earn extra money. With the rise of online platforms, there are various opportunities to earn extra income from the comfort of your home. Utilize your skills or hobbies to explore freelancing or gig economy jobs. Repaying a personal loan for salaried can be critical with a lower income. You need find out extra opportunities to earn more income.

  1. Prioritize High-Interest Debts:

If you have multiple debts, focus on repaying the ones with higher interest rates first. By doing so, you minimize the overall interest you pay in the long run and can channel those funds towards your personal loan repayment.

  1. Save and Invest Wisely:

While it may seem strange, saving even a small portion of your income can act as a financial cushion during emergencies. Additionally, consider low-risk investments that offer steady returns. These savings and investments can act as a safety net, ensuring you don’t resort to further borrowing in times of need.

  1. Seek Financial Counseling:

You may seek advice from financial counsellor in case of any doubt to understand loan terms and financial challenges to repay the loan. Many non-profit organizations and financial counsellors offer free services to help you create a sustainable repayment plan and achieve financial stability.


In India a borrower must have ₹20,000 minimum salary for personal loan. Repaying a personal loan on a low salary demands discipline, careful planning, and responsible behaviour toward the loan. By understanding your financial situation, living within your means, and exploring additional income sources, you can navigate the path to financial freedom and repay your personal loan responsibly. Hope all these tips will help you to repay the personal loan on time.