Loans

Link copied!

Personal Loan Calculator

Compare EMI and total interest across different tenures and rates. Adjust any input below and your results update instantly.

Your details

Adjust the inputs below and your results update instantly.

Loan amount (₹)*

≈ ₹5.00 L

The amount you're borrowing; personal loans are unsecured, so lenders usually cap them lower than home loans.

₹50K₹40L

e.g. ₹5,00,000 for a personal loan

Interest rate (% p.a.)*

Personal loans are unsecured, so lenders charge a higher rate than secured loans like home or car loans.

10%24%

e.g. 14% for a personal loan

Loan tenure (years)*

Personal loans typically run for shorter tenures than home loans.

e.g. 3 years

Processing fee (%)*

A one-time fee lenders deduct from your disbursed amount; it doesn't reduce what you owe, only what you actually receive.

0%3%

e.g. 2% processing fee

How these compare

vs. typical India long-term ranges

Interest rate: 14%

Typical personal loan rate: 11–16%

Typical

These are example numbers. Edit any input on the left to see your own.

Your monthly EMI is

₹17,089

over 3 years

Net disbursement

₹4.90 L

Total interest

₹1.15 L

Your effective interest rate

The processing fee reduces what you receive, not what you owe, so your true cost of borrowing is higher than the advertised rate.

Nominal rate

14%

Processing fee

₹10,000

Net disbursement

₹4.90 L

Effective annual rate

15.43%

Outstanding balance vs. interest paid

Outstanding balanceInterest paid so far

Principal vs. interest, by year

PrincipalInterest

How much of that year's EMI payments went toward principal vs interest. Hover a bar for exact figures.

Year-by-year amortization

"% of principal repaid" shows how much of your loan you've paid off by that year.

YearOutstanding balanceInterest paid so farStatus

1₹3.56 L₹60,987

29% loan repaid

29% of principal repaid

2₹1.90 L₹1.00 L

62% loan repaid

62% of principal repaid

3₹0₹1.15 L

100% loan repaid

100% of principal repaid

Compare scenarios

See how the processing fee alone moves your true cost.

Your plan

2% fee · 14%

15.43%

Effective annual rate

Baseline

No processing fee

0% fee · 14%

14.00%

Effective annual rate

-1.43pp

Fee 3%

3% fee · 14%

16.16%

Effective annual rate

+0.73pp

Worked example, using your numbers

A step-by-step walkthrough of how your loan becomes your true cost of borrowing.

Step 1 · Net disbursement

After a 2% processing fee on your ₹5.00 L loan, you'll actually receive

₹4.90 L

Step 2 · EMI formula

Applying the EMI formula on the full ₹5.00 L at 14% gives you

₹17,089

Step 3 · Effective rate

Solving for the rate that fairly prices ₹4.90 L against that EMI gives

15.43%

✓

Your ₹5.00 L personal loan carries an EMI of ₹17,089, but after the processing fee, your real borrowing cost is 15.43%, not the advertised 14%.

Personalised insights

What your numbers reveal, and what changing them would do.

Your ₹5.00 L loan needs an EMI of ₹17,089

Over 3 years at 14%, you'll pay ₹1.15 L in interest, for a total repayment of ₹6.15 L.

A 2% processing fee pushes your effective rate to 15.43%

The advertised 14% only tells part of the story: after the fee, 15.43% is your true annual cost of borrowing.

You'll actually receive ₹4.90 L, not the full ₹5.00 L

The ₹10,000 processing fee is deducted upfront, but your EMI is still calculated on the full ₹5.00 L.

A 3% fee would push your effective rate to 16.16%

Even without changing your loan amount or nominal rate, a higher processing fee alone raises your true cost of borrowing.

How this is calculated

Every step of the math behind your result, shown in the open.

Net disbursement after fees

P = loan amount, f = processing fee (%), D = net disbursement

Your processing fee (f) is deducted from your loan amount (P) before it's disbursed; D is what actually lands in your account.

Example: ₹5.00 L × (1 − 2%) → ₹4.90 L disbursed

The EMI formula

P = loan amount, r_m = monthly rate, n = number of months

Your EMI is calculated on the full loan amount (P) at the nominal rate. The processing fee doesn't change what you owe, only what you receive.

Example: ₹5.00 L over 36 months at 1.167%/month → ₹17,089 EMI

Solving for the effective rate

D = net disbursement, EMI = monthly instalment, n = months, r_eff = effective monthly rate

Since you receive D but repay the same EMI regardless, the rate (r_eff) that fairly prices that EMI stream against D (solved numerically) is your true monthly cost, always higher than the nominal rate whenever a fee applies.

Example: ₹4.90 L against ₹17,089/mo for 36 months → 15.43% effective rate

Assumptions

The interest rate stays fixed for the entire tenure: floating-rate resets aren't modeled.
No prepayments, foreclosure, or missed instalments are made during the tenure.
The effective rate reflects only the processing fee. Other charges like insurance or documentation fees aren't included.
Figures are indicative and pre-tax, not financial advice.

Understanding your personal loan

The concept, the motivation, and what to watch out for.

What is a personal loan?

A personal loan is unsecured: it isn't backed by collateral like a home or car, which is why lenders charge a higher interest rate to compensate for the added risk.

Most personal loans also carry a one-time processing fee, deducted upfront from your loan amount. Since you receive less than you borrowed but still repay EMIs on the full amount, your true cost of borrowing is higher than the advertised rate.

The advertised rate isn't your real cost

A processing fee means you receive less than you borrow: the effective interest rate you actually pay is always higher than the nominal rate once a fee applies.

Shorter tenures are the norm

Unlike home loans, personal loans are usually repaid within a few years. A shorter tenure means a higher EMI but far less total interest.

Foreclosing early isn't always free

Many personal loans charge a prepayment penalty, often 2-5% of the outstanding balance, if you close the loan before a lock-in period. Check this before assuming an early payoff saves as much as the interest math suggests.

Did you know?

A few facts behind personal loans and their true cost.

Fee

Processing fees are usually non-refundable

Once paid, a processing fee is rarely returned, even if you repay the loan early or switch lenders soon after.

No collateral means higher rates

Personal loans aren't secured against an asset, so lenders price in the added risk with a meaningfully higher interest rate than home or car loans.

Foreclosure charges are common

Many personal loans charge a foreclosure penalty on early repayment, a cost structure less common on floating-rate home loans.

Rule

Short tenure, high EMI, low interest

Personal loans favor short tenures: a higher EMI, but a fraction of the total interest you'd pay by stretching the same loan longer.

Frequently asked questions

Straight answers to the questions we hear most about personal loans.

What is a personal loan?

A personal loan is an unsecured loan (no collateral required), typically used for expenses like medical bills, weddings, or debt consolidation. Because it's unsecured, lenders charge a higher interest rate than secured loans.

Why is a personal loan's effective rate higher than the advertised rate?

Most personal loans deduct a one-time processing fee from your loan amount before disbursing it. Since you receive less than you borrowed but still repay EMIs on the full amount, your true cost of borrowing is higher than the nominal rate.

Is the processing fee refundable?

No, processing fees are almost always non-refundable, even if you foreclose the loan early or it's rejected after fee collection at some lenders. Always confirm your specific lender's policy.

Do personal loans have foreclosure or prepayment charges?

Many personal loans charge a foreclosure or prepayment penalty (commonly 2–5% of the outstanding amount), unlike some floating-rate home loans which the RBI exempts from such charges. Check your loan agreement before prepaying.

Does taking a personal loan affect my credit score?

Yes. Timely EMI payments can improve your credit score over time, while missed payments hurt it. Applying for multiple personal loans in a short period can also temporarily lower your score.

Is this financial advice?

No. This tool provides indicative estimates based on your assumptions. Consult your lender or a certified financial advisor before making borrowing decisions.