Personal loans need no collateral and almost no questions — which is exactly why they charge 10%–24% interest plus processing fees. They make sense for genuine needs (medical emergency, consolidating costlier credit-card debt) and are dangerous for lifestyle spending, because the EMI looks small while the interest quietly doubles the cost of whatever you bought. This calculator shows the true EMI for any loan amount, rate and tenure, adds processing fees and GST on fees into the total cost, and flags whether the EMI fits the 40% rule (total EMIs under 40% of take-home pay). Run the numbers before the bank's relationship manager runs them for you.
How personal loan EMI works
Same EMI formula as any reducing-balance loan, but rates are higher because the loan is unsecured. Tenures run 1–5 years; longer tenure, lower EMI, much higher interest.
Example
₹5,00,000 at 13% for 4 years, 1% processing fee. EMI ≈ ₹13,435. Total interest ≈ ₹1,44,880. Add the ₹5,900 fee (+GST) and the loan costs ~₹1,51,500 over principal.
The real cost
Processing fee (0.5–2% + 18% GST), prepayment/foreclosure charges (2–5% — many banks allow none after 12 months), and late-payment penalties all sit outside the advertised rate. Compare loans on total cost, not just the rate.
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Frequently asked questions
What is the personal loan interest rate in India?
Typically 10%–24% depending on your credit score, employer category and relationship with the bank. Salaried employees of top companies get the best rates.
How much personal loan can I get on my salary?
Banks usually cap total EMIs at 40–50% of net monthly income and lend 10–24x monthly salary, subject to credit history.
Does a personal loan affect my credit score?
Yes — timely EMIs build it, missed ones damage it fast. Multiple applications in a short time also create hard inquiries.
Can I prepay a personal loan?
Usually yes after 6–12 months, with foreclosure charges of 2–5% at many banks. Some banks and NBFCs allow free prepayment — check before signing.