We use cookies to help us improve and protect our services. By continuing to use the site, you agree to our Privacy and Cookies Policy
Close cookies banner
Creditspring logo
how to lower personal loan payments resized
how to lower personal loan payments resized

Written by:

How to lower personal loan payments

With interest rates on the rise, your personal loan repayments may have gotten more expensive. Whether you have one personal loan or several, higher monthly payments can make it harder to manage your finances and stay on top of your debts.
Instagram LinkedIn TikTok Facebook Twitter

With interest rates on the rise, your loan repayments may have gotten more expensive. 

Whether you have one personal loan or several, higher monthly payments can make it harder to manage your finances and stay on top of your debts.

If you're negatively affected by higher interest rates and are concerned about affordability, here's our guide on lowering personal loan payments.

Repaying loans early

Are you in a position to pay your loan sooner rather than later?

This won't be an option for everyone, but you can reduce the interest you owe and get back on the straight and narrow by repaying loans early.

Think of this as an opportunity to clean the slate and start afresh.

Here are a couple of ways to repay loans early.

Repaying loans with savings

Repaying loans with savings can allow you to reduce the amount you owe and save money on interest over time.

If you have a healthy savings account, you could use this to your advantage by making a lump sum payment on your debt. 

For example, Creditspring's personal loans are completely flexible and are there to help you build credit, not trap you in early fees.

Even if you don't have enough to fully clear the loan, paying off a portion of it could help you lower monthly payments and reduce interest charges.

Creating a household budget

If you're unsure how you'll find the money to repay your loan early, creating a budget could help. Never made a budget before? Read on for our step by step guide.

Gather all financial statements together. This includes bank statements, bills and any credit card/loan paperwork. 


Add up your income. Work out how much money you get each month from your job, benefits, gifts from family or any other sources of income.


Calculate fixed expenses. Add up exactly how much you spend each month on fixed costs such as your mortgage/rent, council tax, bills, transport, pension, childcare and food costs.


Calculate other necessary costs. Next, add up how much you spend on costs that aren't fixed but are still somewhat necessary. For example, you probably need to set money aside for clothes, toiletries and, if you have kids, school costs or fees for extracurricular activities.


Work out how much you spend on non-essentials. Finally, it's time to add up how much you spend on non-essentials. This list might include Netflix, meals out and clothes that you want rather than need.


Decide what you can remove. If you have no income left over once you've created your budget, use the information you've gathered together to decide what you can cut or reduce. You don't have to get rid of all the fun expenses. You'll find it hard to save money if you don't have anything to look forward to.

Hopefully, with the help of a budget, you can find extra money that can be used to increase your personal loan repayments and pay off your debts sooner.

If you realise that you've been overspending on a lot of non-essentials, you may be able to make a large lump sum payment and clear your debt in one go!

Switching to a lower interest rate

Switching to a lower interest rate is another way to lower personal loan payments.

Before you start the process, make a note of your current monthly payments, work out how long you have left on your loan and find out how much it'd cost to pay off your loan in full now.

Next, you'll need to compare a number of different personal loan deals until you find one that lets you pay off your existing loan while also charging a lower interest rate.

Some lenders will charge a fee to pay off your loan early. They call this a settlement figure. It's a good idea to factor this settlement figure into the amount you need to borrow from your new lender.

Reducing the term of the loan

If you want to slash the amount of money you spend on your debt, you may be able to reduce the term of the loan. 

Your monthly payment might go up because you’ll have less time to repay the debt than you had before, but you’ll also spend less money on interest and the total cost of the loan will go down.


Increasing your income

Increasing your income can be easier said than done, but it’s one of the most effective ways to lower your personal loan payments and become debt-free.

Here are a few ways to bring in extra cash:

  • Negotiate a pay rise at work

  • Switch to a better-paid job

  • Pick up overtime

  • Get a second job

  • Monetise one of your skills

  • Rent out a room in your home (if you rent, it's a good idea to ask your landlord's permission before subletting the property)

  • Sell unwanted items online

Can you benefit from the government's Rent a Room scheme?

If you're a homeowner with a spare bedroom, you may be able to make a consistent tax-free income with the help of the Rent a Room scheme.

The Rent a Room Scheme lets you earn up to £7,500 per year tax-free by renting out a furnished room in your home.

You could then use this income to pay off your debts without having to worry about paying tax on them.

Refinancing your debt

If you have several personal loans and you’re wondering how to lower personal loan payments, you could refinance your debt. 

You can do this with the help of a debt consolidation loan. This type of loan will allow you to merge all your monthly payments into one.

If you decide to refinance your debt, you can experience the following benefits:

  • - Lower monthly repayments

  • - Easier to manage your repayments as you won't have as many

  • - Reduced interest rate and therefore the debt becomes more affordable

When you refinance your debt with the help of a debt consolidation loan, the lender will need to carry out a credit search to assess the health of your credit file. 

This search will leave an imprint on your credit report and it will also lower your credit score temporarily.


Thankfully, it shouldn’t take long to improve your credit score again. 

As long as you make your payments on time and in full, you can build your credit rating over time and increase your chances of getting good personal loans with affordable interest rates in future.

A debt consolidation loan can be an attractive option and may seem like a quick fix if your existing debt feels unmanageable or expensive.

Debt consolidation loans won't be suitable for everyone. In some cases, they can cost more than sticking with the personal loans you already have. 

So be sure to compare a few different deals before submitting a personal loan application.

Whether you refinance your debt or borrow money from friends and family, there are lots of ways to lower personal loan payments.

Not only can lowering your payments reduce your monthly expenses, it can also help you avoid stress and reduce the amount you spend on interest. 

Join Creditspring
Are you ready to start your journey with Creditspring?
Check your eligibility