Tools To India

Personal Loan EMI Calculator

Personal loans are unsecured, so they carry the highest rates of any mainstream borrowing. Enter the amount, rate and tenure to see what the loan really costs.

Last updated

₹5 Lakh · Lenders often deduct the processing fee from the disbursal, so you may receive slightly less than this.

Unsecured personal loan rates in India typically run well into double digits.

Personal loans usually run one to seven years.

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Monthly EMI

₹13,413.75

4 years at 13% a year, on a monthly reducing balance

What you repay

  • Principal: ₹5,00,000
  • Interest: ₹1,43,860
Loan amount
₹5,00,000
Total interest payable
₹1,43,860
Total amount payable
₹6,43,860
Interest as a share of what you repay
22.34%
  • Assumes a fixed rate for the whole tenure and that every instalment is paid on time.
  • Processing fees, documentation charges, insurance premiums and GST on fees are not included — ask your lender for the annual percentage rate covering all of them.

Year-by-year repayment schedule

Year-by-year repayment schedule
YearPrincipal paidInterest paidBalance left
1₹1,01,894₹59,070₹3,98,106
2₹1,15,959₹45,006₹2,82,146
3₹1,31,965₹29,000₹1,50,181
4₹1,50,181₹10,784₹0

How this calculator works

A personal loan has no collateral behind it. The lender has nothing to repossess if you stop paying, so the rate is priced for that risk — normally several percentage points above a secured loan and many points above a home loan.

The maths is identical to any other reducing-balance loan, but two things deserve attention. First, the processing fee is often deducted from the disbursal, so you receive less than the sanctioned amount while paying interest on the full sum. Second, short tenures mean the headline rate translates into a smaller total interest figure than people expect, which can make an expensive loan look cheap.

Compare the total amount payable, not the EMI. A lower instalment stretched over a longer tenure at a high rate is the most expensive combination available.

The formula

Equated monthly instalment

EMI = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1)

P
Principal — the amount actually disbursed to you
r
Monthly interest rate = annual rate ÷ 12 ÷ 100
n
Tenure in months

Every retail lender in India quotes EMI on a monthly reducing balance. Interest for a month is charged on the balance outstanding at the start of that month, so the interest portion of each instalment falls and the principal portion rises, even though the instalment itself never changes.

How one instalment splits

Interest this month = outstanding balance × r Principal this month = EMI − interest this month

This is why the early years of a long loan barely dent the principal. On a 20-year home loan, roughly two-thirds of the first instalment is interest.

Worked example: ₹5 lakh at 13% for 4 years

Anil takes a ₹5,00,000 personal loan at 13% for 48 months to consolidate other debt.

Step-by-step calculation for the worked example
Loan amount₹5,00,000
Rate13% a year
Tenure48 months
EMI₹13,414
Total repaid₹6,43,857
Total interest₹1,43,857
Interest as a share of repayment22.3%

Anil pays about ₹1.44 lakh to borrow ₹5 lakh for four years. If a processing fee of 2% is deducted up front, he receives ₹4.90 lakh but still pays interest on ₹5 lakh — pushing the effective cost higher still.

Things worth knowing

  • Check whether the processing fee is deducted from the disbursal or charged separately. Deduction raises your effective rate because you pay interest on money you never received.
  • Personal loans often carry a foreclosure charge and a lock-in period during which prepayment is not allowed at all. Ask before signing, not after.
  • A "flat rate" quote is not comparable to a reducing-balance rate. A flat 8% is roughly 14–15% reducing. Always convert before comparing offers.
  • Using a personal loan to pay off credit card debt usually lowers the rate substantially, but it only helps if the card is then left unused. Otherwise you end up carrying both.
  • Every application triggers a hard credit enquiry. Applying to several lenders in quick succession can lower your score at exactly the moment you need it to be high.

Frequently asked questions

Why is a personal loan rate so much higher than a home loan rate?
Because there is no security. A home loan is backed by a property the lender can sell; a personal loan is backed only by your promise to pay. The rate difference is the price of that risk, and it is why a personal loan should be a short-term solution rather than long-term financing.
Can I prepay a personal loan?
Usually yes, but often not immediately and often not free. Many lenders impose a lock-in of six to twelve instalments and charge a foreclosure fee on the outstanding principal. The restriction that protects floating-rate home loans from prepayment penalties does not extend to personal loans.
Does a personal loan hurt my credit score?
Taking one and repaying it on time generally helps, because it demonstrates you can handle unsecured credit. What hurts is a high number of applications in a short period, a high total debt burden relative to income, and any missed instalment.
What documents do lenders normally ask for?
Typically identity and address proof, PAN, recent salary slips or income tax returns, and bank statements covering the last few months. Lenders vary, and pre-approved offers to existing customers often need far less. Check the specific lender’s list rather than assuming.

Sources

Every figure on this page is traceable to the official source below. If a source has changed since the date shown, please tell us and we will correct it.