Personal Loan EMI Calculator
Calculate EMI, total interest and effective cost for personal loans in India.
Effective cost = Total interest + Processing fee as % of principal.
How personal loan EMI is calculated
Personal loan EMI uses the flat or reducing balance method. Most banks in India use the reducing balance method, where interest is charged on the outstanding principal each month.
Tips for personal loans
Processing fees of 1–3% are often negotiable, especially for salaried employees of large companies or existing bank customers. Even 1% on ₹5L saves ₹5,000.
A ₹5L loan at 12% for 12 months costs ~₹32,000 in interest. At 36 months, interest rises to ~₹97,000. Pay off faster if your income allows.
If your credit score has improved since taking the loan, transfer to a lower-rate lender. Even 2% savings on ₹5L over 2 years is ~₹10,000.
Frequently asked questions
What is the typical personal loan interest rate in India in 2025?
Personal loan interest rates in India range from 10% to 24% p.a. in 2025. Top banks offer rates starting at 10.5–12% to salaried individuals with excellent credit scores (750+). NBFCs and fintech lenders may charge 16–24% for riskier profiles.
What is the maximum tenure for a personal loan?
Most banks offer personal loans for up to 60 months (5 years). Some banks like SBI and HDFC offer up to 72–84 months for specific products. Longer tenures mean lower EMIs but significantly higher total interest.
What is the difference between flat rate and reducing balance?
A flat rate charges interest on the original principal throughout the tenure. Reducing balance charges interest only on the outstanding amount, which decreases each month. A flat rate of 8% is roughly equivalent to a reducing balance rate of 14–15%.
Can I get a personal loan without salary slip?
Yes. Self-employed individuals can get personal loans based on ITR for 2–3 years, bank statements, and business proof. Some lenders accept Form 16 or a letter from the employer instead of salary slips for salaried applicants.
Does prepaying a personal loan affect my credit score?
Prepayment generally does not negatively affect your credit score. However, closing a long-standing credit account can slightly reduce your credit history length. The overall impact is usually positive as it reduces your debt burden and improves your debt-to-income ratio.