diff --git a/rpcs3/Emu/Cell/PPUModule.cpp b/rpcs3/Emu/Cell/PPUModule.cpp
index f4532111bf..3ad5626537 100644
--- a/rpcs3/Emu/Cell/PPUModule.cpp
+++ b/rpcs3/Emu/Cell/PPUModule.cpp
@@ -809,6 +809,11 @@ void try_spawn_ppu_if_exclusive_program(const ppu_module& m)
 
 std::shared_ptr<lv2_prx> ppu_load_prx(const ppu_prx_object& elf, const std::string& path)
 {
+	if (elf != elf_error::ok)
+	{
+		return nullptr;
+	}
+
 	// Create new PRX object
 	const auto prx = idm::make_ptr<lv2_obj, lv2_prx>();
 
@@ -1161,6 +1166,11 @@ void ppu_unload_prx(const lv2_prx& prx)
 
 bool ppu_load_exec(const ppu_exec_object& elf)
 {
+	if (elf != elf_error::ok)
+	{
+		return false;
+	}
+
 	// Check if it is a standalone executable first
 	for (const auto& prog : elf.progs)
 	{
@@ -1740,6 +1750,11 @@ bool ppu_load_exec(const ppu_exec_object& elf)
 
 std::pair<std::shared_ptr<lv2_overlay>, CellError> ppu_load_overlay(const ppu_exec_object& elf, const std::string& path)
 {
+	if (elf != elf_error::ok)
+	{
+		return {nullptr, CELL_ENOENT};
+	}
+
 	// Access linkage information object
 	const auto link = g_fxo->get<ppu_linkage_info>();
 
diff --git a/rpcs3/Emu/Cell/PPUThread.cpp b/rpcs3/Emu/Cell/PPUThread.cpp
index 4fdadf4c39..c4f124b992 100644
--- a/rpcs3/Emu/Cell/PPUThread.cpp
+++ b/rpcs3/Emu/Cell/PPUThread.cpp
@@ -2423,13 +2423,14 @@ extern void ppu_precompile(std::vector<std::string>& dir_queue, std::vector<lv2_
 
 			elf_error prx_err{}, ovl_err{};
 
-			if (const ppu_prx_object obj = src; (prx_err = obj, obj == elf_error::ok))
+			if (ppu_prx_object obj = src; (prx_err = obj, obj == elf_error::ok))
 			{
 				std::unique_lock lock(sprx_mtx);
 
 				if (auto prx = ppu_load_prx(obj, path))
 				{
 					lock.unlock();
+					obj.clear(), src.close(); // Clear decrypted file and elf object memory
 					ppu_initialize(*prx);
 					idm::remove<lv2_obj, lv2_prx>(idm::last_id());
 					lock.lock();
@@ -2443,7 +2444,7 @@ extern void ppu_precompile(std::vector<std::string>& dir_queue, std::vector<lv2_
 				prx_err = elf_error::header_type;
 			}
 
-			if (const ppu_exec_object obj = src; (ovl_err = obj, obj == elf_error::ok))
+			if (ppu_exec_object obj = src; (ovl_err = obj, obj == elf_error::ok))
 			{
 				while (ovl_err == elf_error::ok)
 				{
@@ -2459,6 +2460,8 @@ extern void ppu_precompile(std::vector<std::string>& dir_queue, std::vector<lv2_
 						break;
 					}
 
+					obj.clear(), src.close(); // Clear decrypted file and elf object memory
+
 					ppu_initialize(*ovlm);
 
 					for (auto& seg : ovlm->segs)
diff --git a/rpcs3/Emu/Cell/lv2/sys_overlay.cpp b/rpcs3/Emu/Cell/lv2/sys_overlay.cpp
index 3c7609dc9f..bff88aaa00 100644
--- a/rpcs3/Emu/Cell/lv2/sys_overlay.cpp
+++ b/rpcs3/Emu/Cell/lv2/sys_overlay.cpp
@@ -35,7 +35,7 @@ static error_code overlay_load_module(vm::ptr<u32> ovlmid, const std::string& vp
 
 	u128 klic = g_fxo->get<loaded_npdrm_keys>()->devKlic.load();
 
-	const ppu_exec_object obj = decrypt_self(std::move(src), reinterpret_cast<u8*>(&klic));
+	ppu_exec_object obj = decrypt_self(std::move(src), reinterpret_cast<u8*>(&klic));
 
 	if (obj != elf_error::ok)
 	{
@@ -44,6 +44,8 @@ static error_code overlay_load_module(vm::ptr<u32> ovlmid, const std::string& vp
 
 	const auto [ovlm, error] = ppu_load_overlay(obj, vfs::get(vpath));
 
+	obj.clear();
+
 	if (error)
 	{
 		return error;
diff --git a/rpcs3/Emu/Cell/lv2/sys_prx.cpp b/rpcs3/Emu/Cell/lv2/sys_prx.cpp
index 1f74cdaab0..4d54456a77 100644
--- a/rpcs3/Emu/Cell/lv2/sys_prx.cpp
+++ b/rpcs3/Emu/Cell/lv2/sys_prx.cpp
@@ -266,7 +266,7 @@ static error_code prx_load_module(const std::string& vpath, u64 flags, vm::ptr<s
 
 	u128 klic = g_fxo->get<loaded_npdrm_keys>()->devKlic.load();
 
-	const ppu_prx_object obj = decrypt_self(std::move(src), reinterpret_cast<u8*>(&klic));
+	ppu_prx_object obj = decrypt_self(std::move(src), reinterpret_cast<u8*>(&klic));
 
 	if (obj != elf_error::ok)
 	{
@@ -275,6 +275,8 @@ static error_code prx_load_module(const std::string& vpath, u64 flags, vm::ptr<s
 
 	const auto prx = ppu_load_prx(obj, path);
 
+	obj.clear();
+
 	if (!prx)
 	{
 		return CELL_PRX_ERROR_ILLEGAL_LIBRARY;
diff --git a/rpcs3/Emu/System.cpp b/rpcs3/Emu/System.cpp
index ed65663971..44cfa5be5c 100644
--- a/rpcs3/Emu/System.cpp
+++ b/rpcs3/Emu/System.cpp
@@ -1597,7 +1597,7 @@ game_boot_result Emulator::Load(const std::string& title_id, bool add_only, bool
 			// Overlay (OVL) executable (only load it)
 			else if (vm::map(0x3000'0000, 0x1000'0000, 0x200); !ppu_load_overlay(ppu_exec, m_path).first)
 			{
-				ppu_exec = fs::file{};
+				ppu_exec.set_error(elf_error::header_type);
 			}
 
 			if (ppu_exec != elf_error::ok)
diff --git a/rpcs3/Loader/ELF.h b/rpcs3/Loader/ELF.h
index 3de72ddad7..76f86f714e 100644
--- a/rpcs3/Loader/ELF.h
+++ b/rpcs3/Loader/ELF.h
@@ -170,12 +170,7 @@ enum class elf_error
 template<template<typename T> class en_t, typename sz_t, elf_machine Machine, elf_os OS, elf_type Type>
 class elf_object
 {
-	elf_error m_error{};
-
-	elf_error set_error(elf_error e)
-	{
-		return m_error = e;
-	}
+	elf_error m_error = elf_error::stream; // Set initial error to "file not found" error
 
 public:
 	using ehdr_t = elf_ehdr<en_t, sz_t>;
@@ -329,6 +324,31 @@ public:
 		}
 	}
 
+	elf_object& clear()
+	{
+		// Do not use clear() in order to dealloc memory
+		progs = {};
+		shdrs = {};
+		header.e_magic = 0;
+		m_error = elf_error::stream;
+		return *this;
+	}
+
+	elf_object& set_error(elf_error error)
+	{
+		// Setting an error causes the state to clear if there was no error before
+		// Trying to set elf_error::ok is ignored
+		if (error != elf_error::ok)
+		{
+			if (m_error == elf_error::ok)
+				clear();
+
+			m_error = error;
+		}
+
+		return *this;
+	}
+
 	// Return error code
 	operator elf_error() const
 	{