The Plainspeak / Loans

Loans · 3 min

The loan health checkup

Twelve quick checks that tell you whether a loan is helping you or draining you, and the one move that fixes most of them.

By 37xBetter · Last reviewed September 2026

A loan is not good or bad on its own. It is good or bad for you, at this rate, for this reason, right now. This is a quick self-check: twelve yes/no questions in three sections. Answer honestly, count your YESes, and read the actions for every NO. It takes about three minutes with a pen.

Section A: do you know your loan?

• Do you know your current outstanding principal?
• Can you state your interest rate without checking?
• Do you know how much of your last EMI went to interest versus principal?
• Have you read your loan statement in the last three months?

Section B: are you prepaying smartly?

• Have you made at least one prepayment in the last twelve months?
• When you prepay, do you choose tenure reduction, not EMI reduction?
• Do you have a simple plan to prepay from each bonus or raise?
• Do you check the exact interest saved before prepaying?

Section C: is your loan structured well?

• Have you compared your rate to current market rates in the last year?
• Do you keep at least 6 months of expenses liquid before prepaying?
• Have you asked your lender for a reset to their best existing-borrower rate?
• Are you avoiding lowering your EMI just to free up cash you do not actually need?

Score it

10 to 12 YES: sharp. You run your loan, not the other way round. Keep one prepayment going. 7 to 9: solid, with leaks. Close the NOs and you will likely save lakhs. 4 to 6: leaking, and the biggest savings here are the easiest fixes. 0 to 3: a huge opportunity. Start by knowing your numbers, then make one prepayment.

The fix for almost every NO

It is the same first step: run your actual loan through the Prepayment Player. You will see your real interest saved, choose tenure reduction, and set a prepayment you will not miss. Even one extra EMI a year can cut more than three years off a twenty-year loan. And check your EMI load while you are at it: if every EMI together crosses about 40% of your take-home, one bad month becomes a problem, so prepay, refinance, or hold off on the next loan until the ratio comes down.