Work out your personal loan EMI, total interest and year-wise repayment — and see how the higher unsecured rate (10–24%, as of indicative ranges 2026 — verify with your lender) drives the cost.
How this personal loan EMI calculator works
A personal loan EMI is a fixed monthly payment computed on a reducing balance — exactly like a home or car loan, just at a higher rate:
EMI = P × i × (1 + i)n ÷ [ (1 + i)n − 1 ]
Here P is the loan amount, i the monthly rate (annual ÷ 12) and n the number of months. The year-wise table shows how each EMI splits between interest and principal over the life of the loan.
Worked example: ₹5 lakh for 5 years at 12%
A ₹5,00,000 personal loan at 12% over 5 years gives an EMI of ₹11,122. You repay ₹6,67,333 in total — the ₹5 lakh principal plus ₹1,67,333 (₹1.67 lakh) of interest. A 2% processing fee would deduct a further ₹10,000 upfront, so plan around the all-in cost, not just the EMI.
Why personal-loan rates are higher
A personal loan is unsecured — no collateral backs it — so lenders price in default risk, pushing rates to 10%–24%. Your CIBIL score, income stability and employer category decide where in that band you land. A score above 750 typically unlocks the lowest rates; below 700, both approval and pricing get harder.
Processing fees and foreclosure charges
Two costs sit outside the EMI. A one-time processing fee of 1%–3% (plus GST) is deducted from the disbursal. A foreclosure fee of 2%–5% of the outstanding principal may apply if you close the loan early, after the initial lock-in. Because personal-loan interest is front-loaded, foreclosing usually still saves money — compare the interest you would avoid against the foreclosure fee before deciding.
Keeping the cost down
Unlike a home loan, a personal loan offers no tax deduction, so there is no reason to stretch it. Borrow the minimum you need, pick the shortest tenure your budget allows, and keep total EMIs within 40–50% of net income. If you have a sinking-fund goal instead of an emergency, saving in an FD first is almost always cheaper than borrowing.
Frequently Asked Questions
How is personal loan EMI calculated?
The same reducing-balance formula as any loan: EMI = P × i × (1+i)n ÷ [(1+i)n − 1], where P is the amount, i the monthly rate (annual ÷ 12) and n the months. Because personal loans carry higher rates than secured loans, the interest share of each EMI is larger — keep the tenure short if you can afford the higher monthly payment.
Why are personal loan interest rates so high?
A personal loan is unsecured — there is no house or car the lender can repossess if you default — so the rate prices in that risk. Rates typically run 10%–24% depending on your credit score, income and employer. Improving your CIBIL score before applying is the single biggest lever on the rate you are offered.
What is a personal loan processing fee?
Lenders charge a one-time processing fee, usually 1%–3% of the loan amount (plus GST), deducted upfront. On a ₹5,00,000 loan a 2% fee is ₹10,000, so you receive less than the sanctioned amount while paying EMI on the full sum. Always compare the effective cost, not just the headline rate.
Can I foreclose a personal loan early?
Yes, after the lock-in period (often 6–12 months). Many lenders charge a foreclosure or prepayment fee of 2%–5% of the outstanding principal on fixed-rate personal loans. Even with that fee, foreclosing early usually saves money because you stop paying interest on the balance — run both scenarios before deciding.
How can I reduce my personal loan EMI?
Choose a longer tenure (lower EMI, but more total interest), negotiate a lower rate using a strong credit score, or borrow less. A balance transfer to a cheaper lender can also cut the EMI mid-loan, though it resets fees. Unlike a
home loan, there is no tax deduction to soften the cost, so a shorter tenure is usually wiser.
What credit score do I need for a personal loan?
Most lenders look for a CIBIL score of 750 or higher for the best rates; 700–750 may still qualify but at a higher rate. Below 700, approval gets harder and rates climb toward the 24% end. Steady income and a clean repayment history matter just as much as the raw score.
How much personal loan can I get on my salary?
Lenders keep your total EMIs within roughly 40–50% of net monthly income, counting any existing loans. Because personal-loan EMIs are large relative to the amount borrowed (high rate, short tenure), eligibility is often capped well below what a home loan of the same monthly outgo would allow.
Estimates are for information and education only — not financial, tax or investment advice. Verify current rates and rules with official sources.