Personal loans are unsecured, so they're quick to get but carry higher interest rates than home or car loans. Knowing the exact EMI and total interest helps you decide whether to borrow and for how long.
How personal loan EMI is calculated
EMI = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1)P = loan amount, r = yearly interest rate ÷ 12 ÷ 100, n = number of monthly instalmentsTotal interest = EMI × n − PPersonal loans usually run 1–5 years. Rates depend heavily on your credit score, income and employer, and commonly range from about 10.5% to over 20%.
Worked example
Example: ₹5 lakh at 12% for 3 years
EMI = ₹16,607.
Total interest = ₹97,858, almost 20% of what you borrowed.
The same loan over 5 years would lower the EMI but push interest well past ₹1.6 lakh.
Before you take a personal loan
- Compare the annual percentage rate (APR), which includes processing fees, not just the headline rate.
- Check foreclosure charges: many lenders charge 2–5% if you repay early.
- Avoid using a personal loan for spending that doesn't last, such as holidays or gadgets.
- If you have an FD or a PPF account, a loan against it is usually much cheaper.
- Don't borrow from apps that aren't linked to an RBI-regulated bank or NBFC.
How to use this calculator
- Enter the amount you need.
- Enter the rate you've been offered.
- Pick a tenure, usually 1 to 5 years.
FAQs
Why are personal loan rates higher?
They're unsecured, so lenders charge more. Your credit score and income affect the rate you're offered.
Is a flat rate the same as a reducing rate?
No. A flat rate charges interest on the full loan for the whole term and costs much more than the same reducing rate. This calculator uses a reducing rate.
Results are estimates and aren't financial advice. For decisions about your own money, check with a qualified adviser. Spotted a mistake? Tell us.