Personal Loan EMI Calculator: see what it really costs.
Personal loans have the highest rates of the usual loans for individuals. Before you accept the loan, see the EMI, the total interest and the amortization schedule. Then you know accurately the sum that you must pay.
The full loan, year by year
The total of the principal and the interest does not show all of the loan. These charts show the principal part and the interest part for each year. They also show how slowly the balance decreases, and the month when most of the EMI goes to principal.
Amortization schedule
This table shows the principal part and the interest part of each EMI. It also shows the balance after each payment.
| Year | Principal paid | Interest paid | Total payment | Balance |
|---|
About personal loan EMIs
A personal loan has no security. Thus, its rate is high. Know the conditions of the loan before you accept it.
High rates
Each lender sets the rate for each borrower. Borrowers with the highest credit scores get the lowest rates. Applicants with low credit scores get much higher rates. Compare the rate that the lender gives you with the lowest rate on the website of the lender. If your rate is much higher, your credit score is a possible cause.
Usually 1-5 years
Banks usually do not give personal loans for more than 5 years. A longer tenure gives a smaller EMI, but much more total interest. The interest can be 30% or more of the loan.
Frequently 1-3% at the start
A 2% processing fee on a ₹5 lakh loan is ₹10,000. The lender subtracts it from the money that you get. Include this fee in your effective interest rate. On a short tenure, it can add 0.5-1% to the cost.
With some conditions
You cannot deduct personal loan interest from your income. There are three conditions when you can deduct it:
- You use the loan to get a home or to repair a home (then Section 24/80C can apply).
- You use the loan for a business (you claim the interest as a cost).
- You use the loan for higher education (Section 80E).
Floating-rate: free
Floating-rate personal loans cannot have prepayment fees (RBI rule for individual borrowers). Fixed-rate loans can have foreclosure fees of 3-5%. Read the loan agreement before you accept it.
Loans with lower rates
Before you get a personal loan, examine these alternatives:
- a top-up on your home loan (rates 1-2% lower; the interest can be tax-deductible)
- a loan against a fixed deposit (rate = FD rate + 1-2%)
- a gold loan (rates of 8-12%)
- a loan against equity stocks or mutual funds (rates of 8-10%)
Frequently asked questions
At 12.5% each year for a 4-year tenure, the EMI is approximately ₹13,290 each month. In 4 years, the total interest is approximately ₹1.38 lakh. Thus, the total cost of the loan is ₹6.38 lakh.
If you get the same loan at 11%, the EMI decreases to ₹12,923, and the total interest decreases to ₹1.20 lakh. If you extend the tenure to 5 years at 12.5%, the EMI decreases to ₹11,249. But the total interest increases to ₹1.75 lakh. A shorter tenure costs less in total, also if the EMI is higher.
Personal loans have no security. If you do not pay, the lender has no collateral. The lender adds this risk to the rate.
Home loans (with the property as security) have the lowest rates. Car loans (with the car as security) have higher rates. Personal loans (no security) have rates that are higher than car loan rates. Credit cards (no security, and the balance continues) have the highest rates.
The interest rate includes the possible losses of the lender from borrowers who do not pay. If your credit score is lower, the risk for the lender is higher, and your rate is higher.
Personal loans usually use the same EMI formula as other loans: EMI = P × r × (1+r)ⁿ / ((1+r)ⁿ − 1). P is the principal, r is the monthly interest rate, and n is the tenure in months.
The bank charges interest on the reducing balance. It calculates interest on the remaining principal each month, not on the first loan. This is the standard method. Some lenders show a "flat rate", but the effective rate is higher. Always get the reducing-balance rate, and compare rates of the same type.
Frequently, yes. Credit card interest is usually much higher than personal loan interest. Example: you move a ₹2 lakh credit card balance to a 3-year personal loan at 13%. You pay approximately ₹50,000-70,000 less interest than with minimum payments on the credit card.
Two cautions:
- Do this only if you will NOT use the credit card for a new large balance.
- Compare with a balance transfer offer from the credit card company. Some companies give a 0% rate for 3-6 months.
Below 650: most large banks do not accept the loan. NBFCs can give loans, but at very high rates (20-24%).
650-700: possible but rates will be on the higher end (15-18%).
700-750: most banks give approval at their usual rates (13-15%).
Above 750: the lowest rates (11-13%) and easy approval.
If your score is less than 700, make it better for 6-12 months before you apply. The lower rate decreases the cost by a large quantity for the full tenure. To make your score better, pay all dues on time and keep your credit use below 30%. Do not apply for many loans at the same time.
Sources & standards
This table gives the name of each regulated value on this page, the value, and its primary source. Two Acts apply at this time. The Income-tax Act, 1961 applies to FY 2025-26 — the return that you file at this time. The Income-tax Act, 2025 applies to FY 2026-27 and after. The values are the same. Only the section numbers changed.
| What | Current value | Source | Verified |
|---|---|---|---|
| Principal repayment deduction cap (shared with EPF, PPF, ELSS, insurance) | ₹1,50,000/yr | Income-tax Act, 1961 — s.80C (FY 2025-26 & before) Income-tax Act, 2025 — s.123, read with Schedule XV (applies from 1 Apr 2026) | 2026-07 |
| Education loan interest — no cap, 8 years | — | Income-tax Act, 1961 — s.80E (FY 2025-26 & before) Income-tax Act, 2025 — s.129 (applies from 1 Apr 2026) | 2026-07 |
| Prepayment / foreclosure charges — floating-rate loans | nil on floating effective 2026-01-01 | RBI (Pre-payment Charges on Loans) Directions, 2025 | 2026-07 |
| Fixed Obligation to Income Ratio ceiling | 50–55% | Lender underwriting practice — NOT an RBI rule | 2026-07 |
This is not tax or legal advice. See all the standards that this site uses →