How is personal loan EMI worked out?

Reducing balance on loan amount, rate, and tenure. No collateral. Processing fee (often 1–3% + GST) is shown separately and is not added into the EMI. ₹5 lakh at 12% for 3 years is about ₹16,607/month.

Can I prepay a personal loan?

Many lenders allow part or full prepayment; fixed-rate loans may charge 2–5% on the prepaid amount. Floating-rate personal loans often have no prepayment fee. Read the sanction letter.

What rate do banks use for personal loans?

Rates vary by salary, employer, credit score, and existing relationship. Published rates are starting points; your offer may differ. This tool uses whatever rate you type in.

Personal Loan Calculator

Work out monthly EMI and total cost for a personal loan

Loan Details

Loan Amount (₹)

Interest Rate (% per annum)

Loan Tenure

Processing Fee (%)

Processing fee: ₹10,000

Monthly EMI

₹0

Principal Amount:₹5,00,000

Total Interest:₹0

Processing Fee:₹10,000

Total Cost:₹10,000

Loan Summary

Loan Amount₹5,00,000

Interest Rate12% p.a.

Loan Tenure36 months (3 years)

Monthly EMI₹0

Total Interest₹0

Processing Fee₹10,000

Total Cost₹10,000

Payment Breakdown

Principal Amount5000.0%

Total Interest0.0%

Processing Fee100.0%

0.0%

Interest on Principal

₹0

Annual Payment

About personal loans

What is a personal loan?

An unsecured loan from a bank or NBFC — no collateral. People use it for medical bills, weddings, travel, debt consolidation, or home repairs. The lender fixes the rate and tenure at sanction; you repay in fixed EMIs.

How this calculator works

EMI uses the standard reducing-balance formula on the loan amount, annual rate, and tenure. Processing fee is shown separately as a percentage of the principal — it is not added to the EMI here.

EMI = [P × r × (1 + r)^n] / [(1 + r)^n − 1]

Example: ₹5 lakh at 12% for 3 years → EMI about ₹16,607, interest about ₹97,858, plus ₹10,000 processing fee at 2%.

Tenure and rates

• Tenure is usually 1–5 years; some lenders go up to 7
• Rates often fall between 10.5% and 18% for salaried borrowers
• Your CIBIL score, income, and employer profile affect the offer
• Longer tenure cuts EMI but increases total interest

Processing fee and other charges

Banks typically charge 1–3% of the sanctioned amount as a processing fee, plus GST. Prepayment or foreclosure may carry a penalty on fixed-rate loans. Late EMI payments attract penal interest. These are not built into the EMI figure above — check your sanction letter for actual numbers.

Total cost

"Total cost" here means all EMIs (principal plus interest) plus the processing fee you entered. It does not include GST on the fee, insurance premiums, or any penalty charges.

Before you apply

Compare offers from your salary bank and one or two others — the same profile can get different rates. Read the prepayment and foreclosure clauses. Keep EMI within what you can pay after rent, EMIs on other loans, and regular expenses.

Disclaimer: Figures are estimates. Actual EMI, charges, and eligibility depend on the lender and your credit profile.

Questions & answers

How is personal loan EMI worked out?: Reducing balance on loan amount, rate, and tenure. No collateral. Processing fee (often 1–3% + GST) is shown separately and is not added into the EMI. ₹5 lakh at 12% for 3 years is about ₹16,607/month.
Can I prepay a personal loan?: Many lenders allow part or full prepayment; fixed-rate loans may charge 2–5% on the prepaid amount. Floating-rate personal loans often have no prepayment fee. Read the sanction letter.
What rate do banks use for personal loans?: Rates vary by salary, employer, credit score, and existing relationship. Published rates are starting points; your offer may differ. This tool uses whatever rate you type in.

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