Personal Loan EMI Calculator
The advertised instalment is not the cost of a personal loan. Enter the amount, rate, tenure and processing fee to see what reaches your account and what the loan really charges you.
Loan details
What it costs
Monthly EMI
for —
- Amount credited to you —
- Processing fee —
- Total interest —
- Total you repay —
- Effective rate once the fee is counted —
What this calculator assumes
- Interest is charged on a monthly reducing balance, the basis on which regulated Indian lenders compute retail loan instalments. A flat rate is quoted a different way and produces a different instalment, so a flat quote is not comparable to the number here — see the section on flat rates below.
- The processing fee is charged as a percentage of the sanctioned amount and deducted from the disbursal, so you pay interest on the full loan while receiving less than that.
- GST on the processing fee is excluded from the disbursal figure above, because the applicable rate is not held in this site’s sourced constants and this site does not publish rates it has not read from a primary source. GST is levied on the fee, not on the loan, and it reduces what reaches your account further — so the figure above is the best case.
- The effective rate is the rate that would produce this same instalment on the amount actually disbursed. It excludes documentation charges, stamp duty, insurance premiums and any bounce or late-payment fees.
- The rate is assumed fixed for the whole tenure, and the first instalment falls one month after disbursal.
How the instalment is worked out
A personal loan uses the same reducing-balance formula as every other retail loan in India. Interest each month is charged only on the principal still outstanding, and the instalment is the single amount that clears both principal and interest by the last month:
EMI = P × r × (1 + r)n ÷ ((1 + r)n − 1)
P is the sanctioned amount, n the number of monthly instalments, and r the monthly rate — the annual rate divided by twelve and by a hundred. Take ₹5,00,000 at 12% over 48 months. The monthly rate is 0.01, the instalment works out to about ₹13,167, and over four years you repay roughly ₹6,32,000 — ₹1,32,000 of it interest. That is the number a lender’s advertisement will quote you, and it is the smaller half of the story.
The fee that never appears in the advertisement
A processing fee of 2% on that ₹5,00,000 is ₹10,000, and GST is charged on the fee on top of that. Both come out before the money moves, so something under ₹4,90,000 reaches your account. Your instalment, however, is still calculated on ₹5,00,000. You are paying four years of interest on money you never had. The calculator above shows the fee but leaves the GST out, because this site does not hold the applicable GST rate among its sourced constants — read that line off the sanction letter, where it is itemised, and treat the disbursal figure here as the best case.
The honest way to price that is to ask what rate, charged on the money you actually received, would produce the same ₹13,167 instalment. The answer is about 13.1% on the fee alone, and higher again once the GST on the fee is counted — against a headline of 12%. On a short tenure the gap widens sharply, because the same fixed fee is recovered over fewer instalments. That same 2% fee on a twelve-month loan turns an advertised 12% into nearly 15.9%, where over seven years it adds barely two-thirds of a percentage point. Fees do the most damage exactly where borrowers assume a short loan is the cheap option.
A flat rate is roughly double what it sounds like
Some lenders, particularly at the point of sale, quote a flat rate. A flat rate charges interest on the full original amount for the entire tenure, ignoring every rupee of principal you have already repaid. The arithmetic is worth doing once, slowly.
Borrow ₹5,00,000 at 7% flat for five years. Interest is ₹5,00,000 × 7% × 5 = ₹1,75,000. Total repayment is ₹6,75,000, and dividing by 60 gives an instalment of ₹11,250. Now ask what reducing-balance rate produces an instalment of ₹11,250 on ₹5,00,000 over 60 months: it is 12.5%. The 7% quote and the 12.5% quote are the same loan. As a rough working rule, a flat rate is somewhere near double the equivalent reducing-balance rate, and the multiple rises with tenure. If an offer looks impossibly cheap, this is almost always the reason.
Why unsecured money is expensive
A home loan is cheap because a house sits behind it. A personal loan has nothing behind it. If the borrower stops paying, the lender has no asset to take possession of and no security to sell — only a civil recovery process that costs money, takes years and often ends in a write-off. The loss on a defaulted personal loan is close to the entire outstanding balance.
The rate you are offered is the lender’s cost of funds plus a spread that covers that expected loss, and the spread is set individually. The bureau score is the main input: CIBIL publishes no formal bands, but states that a score above 700 is generally considered good. Advertised rates are the floor offered to the strongest applicants. Treat the rate in your sanction letter, not the one on the billboard, as the real number, and re-run this calculator once you have it.
Cheaper money, if you have something to pledge
Before taking an unsecured loan, check whether you already own the collateral that would make it a secured one. A loan against a fixed deposit is priced at a small margin over the rate the deposit itself earns, because the lender’s security is a deposit it already holds; the deposit keeps earning interest while it is pledged, so you do not break it. A loan against mutual funds works as an overdraft against pledged units, letting you raise cash without selling and without triggering capital gains. RBI caps lending against securities other than listed shares at ₹1 crore per individual with effect from 1 April 2026, which is a ceiling few retail borrowers will meet.
Both carry the risk that the pledged asset is at stake if you default, and a market-linked pledge can be called if the collateral value falls. Neither is free money. But on cost alone they usually beat an unsecured loan by a wide margin.
Foreclosure: check the rate type first
Floating-rate loans taken by an individual for a non-business purpose cannot carry a foreclosure or prepayment penalty. That is an RBI rule rather than a courtesy. The trap is that most personal loans are fixed-rate, and the rule does not reach them. A fixed-rate personal loan can and usually does carry a foreclosure charge on the outstanding principal, and many lenders also bar foreclosure until a minimum number of instalments have been paid.
So the question to ask before signing is not only what the rate is, but whether it is fixed or floating and what it costs to walk away early. If you expect a bonus or a maturity that could clear the loan in year two, that clause is worth more to you than a few basis points on the rate.
What this calculator cannot tell you
It cannot tell you the rate you will actually be offered, which depends on your bureau score, income, employer category and existing obligations. It excludes documentation and stamp charges, and any credit-life insurance premium bundled into the loan — a premium financed as part of the principal earns the lender interest for the whole tenure and is rarely compulsory, so ask.
It also cannot model what happens when you miss an instalment: penal charges, the bounce fee your bank levies, and the mark on your credit report, which is the most expensive of the three. And it takes no view on tax. Interest on a personal loan is not deductible in itself, though where the borrowed money is demonstrably used for house property or a business the interest may be deductible under the head that applies — a question for a tax adviser, not for this tool.
Common questions
Why is the amount credited to my account less than the loan I was sanctioned?
Because the processing fee, and the GST charged on that fee, are almost always deducted from the disbursal rather than billed separately. A ₹5 lakh sanction with a 2% fee loses ₹10,000 before the money moves, and a little more again to GST on that fee, so under ₹4.9 lakh reaches your account. The instalment, however, is still calculated on the full ₹5 lakh. You pay interest on money you never received, which is precisely why a fee raises the true cost of a loan by more than its face value suggests. The sanction letter itemises both deductions — read that line rather than the headline amount.
Can I foreclose a personal loan without a penalty?
Only if it is a floating-rate loan. RBI bars foreclosure and prepayment charges on floating-rate loans taken by an individual for a non-business purpose. Most personal loans are fixed-rate, and on those a foreclosure charge is permitted and usually levied on the outstanding principal, sometimes with a minimum number of instalments to be paid first. Check the rate type and the foreclosure clause in the sanction letter before you assume you can clear the loan early for free.
Is the processing fee refundable if my loan is cancelled or foreclosed?
Generally not. Lenders treat it as payment for underwriting work already done, so it survives both an early foreclosure and, in many cases, a cancellation after disbursal. Some lenders refund it if the sanction is withdrawn before money moves. It is negotiable before you sign and effectively fixed afterwards, so the moment to push for a waiver is while the lender is still competing for your business.
How do I compare two offers when one has a lower rate and a higher fee?
Compare the annual percentage rate, not the headline rate. The APR folds the fee back into the interest rate by asking what rate, charged on the money you actually received, would produce the same instalment. The effective rate shown by this calculator is that number for the fee you enter. A 12% loan with a 2% fee over four years costs about the same as a 13.1% loan with no fee, so a lender quoting 12.5% with no fee is the cheaper of the two.
Does my credit score change the rate I am offered?
Substantially, on an unsecured loan. The rate is the lender’s estimate of the chance you will not repay, and the bureau score is the main input to that estimate. CIBIL does not publish score bands, but states that a score above 700 is generally considered good. Advertised personal loan rates are the best case offered to the strongest files; the rate on your sanction letter is the one that matters, and it can be several percentage points higher.
Sources
Rates and rules on this page were read directly from the following sources on the dates shown. Figures change — if you are about to act on one, confirm it at the source.