Personal loan EMI calculator
What does an unsecured loan really cost once the processing fee is counted?
Unsecured, so the rate is two to three times a home loan.
Charged once, up front, and usually deducted before the money reaches you.
₹10,253per month
- Total interest
- ₹69,108
- Processing fee
- ₹6,000
- Total cost
- ₹3,75,108
- What actually reaches your account
- ₹2,94,000
The EMI is charged on the full loan, not on what reaches your account — the fee is a cost on money you never receive.
- Principal₹3,00,000 · 80%
- Interest₹69,108 · 18%
- Processing fee₹6,000 · 2%
| Year | Fee | Principal repaid | Interest paid | Still owed |
|---|---|---|---|---|
| 1 | ₹6,000 | ₹86,444 | ₹36,592 | ₹2,13,556 |
| 2 | ₹6,000 | ₹1,85,798 | ₹60,274 | ₹1,14,202 |
| 3 | ₹6,000 | ₹3,00,000 | ₹69,108 | ₹0 |
A personal loan is unsecured, so the lender prices your salary slip rather than a house or a car — and then charges a one-time processing fee on top, usually netted off before the money lands. Two things follow: the rate is far above a secured loan's, and the EMI is calculated on the full sanctioned amount, not on the smaller sum that actually reaches your account.
A worked example
Take ₹5,00,000 at 15% a year for 4 years, with a 2% processing fee — inside this calculator’s range, and the shape of quote a salaried borrower with a clean record sees. Put those four numbers into the tool above and it returns:
- ₹5,00,000 Principal — the money borrowed
- ₹1,67,920 Interest over 48 EMIs
- ₹10,000 Processing fee, once, up front
EMI ₹13,915 × 48 = ₹6,67,920, plus the ₹10,000 fee. Only ₹4,90,000 reaches the account.
The EMI is ₹13,915. A quarter of what you hand over — ₹1,77,920 of ₹6,77,920 — is not the loan. And the fee is charged on ₹5,00,000 while ₹4,90,000 is what you get to spend: solve for the rate that turns 48 payments of ₹13,915 into ₹4,90,000 received today and you are paying about 16.1% a year, not the 15% on the quote.
Flat rate is the trap
This calculator uses reducing balance — interest each month on what you still owe, which is how a bank books a personal loan. A dealer or a small lender may quote a flat rate instead, charging interest on the original ₹5,00,000 for all four years: ₹5,00,000 × 15% × 4 = ₹3,00,000, making the monthly payment ₹8,00,000 ÷ 48 = ₹16,667.
The flat figures are the flat formula stated above, not this calculator's output — it only does reducing balance. A flat quote costs nearly double the same reducing-balance number, so never compare the two rates side by side.
What this number does not include
Tax on the fee
GST at the 18% rate for financial services applies to the processing fee and to most other charges. The fee in the calculator is the bare percentage your lender quotes.
Everything else in the sanction letter
Documentation and stamp charges, credit-report fees, and loan-protection insurance the lender bundles in — sometimes funded by adding it to the loan, which quietly raises the EMI.
Foreclosure and part-payment terms
A lock-in of some months, then a percentage of the outstanding to close early. Fixed-rate personal loans are outside the RBI ban that protects floating-rate borrowers.
Late payment
Bounce and penal charges per missed EMI, plus the credit-score damage, which is the expensive half. RBI now requires these to be levied as flat penal charges, not added to your interest rate.
Two more things the figures cannot know. The rate you are quoted depends on your credit score, employer and existing EMIs, so treat any rate here as a scenario until a sanction letter names one — and ask for the Key Facts Statement, which the RBI requires lenders to give retail borrowers, because it states the all-in annual percentage rate with the fees folded in. If your loan is floating rate, the lender will usually hold the EMI steady and add months at the end when rates move, so the tenure above is the one thing that may not survive contact with the market.
Where to go next
If you are weighing this against a secured option, the car loan EMI and home loan EMI calculators run the same maths at secured rates, and the gap is the price of not pledging anything. Once the loan is running, loan prepayment shows what a bonus put into it actually buys — a smaller EMI, or a shorter loan.
What is the EMI on a 5 lakh personal loan?
At 15% a year over four years the EMI is ₹13,915 a month, and the 48 payments come to ₹6,67,920 — ₹1,67,920 of it interest. Add a 2% processing fee of ₹10,000 and the loan costs ₹6,77,920 in all, while only ₹4,90,000 reaches your bank account. Change the amount, rate or tenure in the calculator above and every one of those figures moves with it.
Is the processing fee part of the EMI?
No. The fee is charged once, up front, and most lenders deduct it from the disbursal — so you receive the loan minus the fee, but repay EMIs computed on the full loan. On the example above you pay interest for four years on ₹10,000 you never saw, which is why the fee costs more than its face value suggests.
Why is my personal loan rate higher than a home loan rate?
There is no collateral. If a home loan sours the lender can sell the flat; if a personal loan sours it has only a court and your credit record. That risk is priced into the rate, which is why this calculator starts at 10% and runs to 24%, while a secured loan is quoted from single digits.
Can I claim tax deduction on personal loan interest?
Not for being a loan. Deductibility follows what the money was spent on, not what the product is called: interest on borrowing used to buy, build or repair a house can be claimed under Section 24(b) of the Income-tax Act, and money put into a business is a business expense. Section 80E covers education loans from specified banks and institutions, so a personal loan spent on fees does not qualify. Keep proof of end use, and ask a CA before claiming.
Is there a penalty for closing a personal loan early?
Usually yes. The RBI's bar on foreclosure charges applies to floating-rate loans taken by individuals for non-business purposes, and most personal loans are fixed rate — so whatever foreclosure fee and minimum lock-in your sanction letter names will stand. Read that clause before you plan a prepayment, then compare the penalty against the interest saved.
This page starts from typical figures. In Hundo the same calculator opens on your own — the loan, the deposit, the salary already on the ledger — and says where each number came from.