Paying a Little Extra on Your Loan Each Month: How Much Markup It Saves
A Rs 10 lakh, 4-year loan at 20% with Rs 5,000, 10,000 and 20,000 extra a month: months saved and markup saved.
By the TurantTools PK team · Updated 28 October 2026 · 2 min read
If you have a personal or car loan from a bank, a small extra amount with each instalment cuts the markup a lot, because markup on a reducing balance falls as the balance falls.
A Rs 1,000,000 loan at 20% a year over 48 months
| Extra each month | Total paid a month | Paid off in | Total markup | Saving |
|---|---|---|---|---|
| None | Rs 30,430 | 48 months | Rs 460,657 | Rs 0 |
| Rs 5,000 | Rs 35,430 | 39 months | Rs 362,571 | Rs 98,087 |
| Rs 10,000 | Rs 40,430 | 33 months | Rs 299,891 | Rs 160,766 |
| Rs 20,000 | Rs 50,430 | 25 months | Rs 224,153 | Rs 236,504 |
Before paying extra
- Ask the bank whether there's an early-repayment fee, and whether the extra goes to the principal or to future instalments.
- Keep some emergency savings first, then pay extra.
- If you also have credit card debt, clear that first; its rate is usually higher.