What is a Personal Loan EMI Calculator?
A Personal Loan EMI Calculator helps you estimate your monthly Equated Monthly Installment (EMI) for an unsecured personal loan. It factors in loan amount, interest rate, tenure, and processing fees to give you the total cost of borrowing.
Personal loans are unsecured loans that don't require collateral, making them suitable for emergencies, medical expenses, weddings, travel, or debt consolidation. However, they typically have higher interest rates compared to secured loans like home or car loans.
Personal Loan Interest Rates in India (January 2026)
| Bank/NBFC | Interest Rate | Processing Fee |
|---|---|---|
| HDFC Bank | 9.99% - 12.50% | Up to 2.50% |
| ICICI Bank | 10.50% - 16.00% | Up to 2.25% |
| SBI | 10.05% - 15.05% | 1.50% (min ₹1,000) |
| Axis Bank | 9.99% - 22.00% | Up to 2.00% |
| Kotak Bank | 9.98% - 17.20% | Up to 2.50% |
| Bajaj Finserv | 11.00% - 22.00% | Up to 3.50% |
Rates as of January 2026. Actual rates depend on credit score, income, and employer category.
Personal Loan EMI Formula
Where:
P = Principal (Loan Amount)
r = Monthly interest rate (Annual Rate / 12 / 100)
n = Total number of monthly installments
Example: ₹5 lakh at 12% for 3 years
r = 12 / 12 / 100 = 0.01
n = 3 × 12 = 36 months
EMI = [5,00,000 × 0.01 × (1.01)^36] / [(1.01)^36 - 1]
EMI = ₹16,607 per month
Understanding Effective Interest Rate
The effective interest rate includes processing fees and other charges, giving you the true cost of borrowing:
Example: ₹5 lakh loan at 12% with 2% processing fee (₹10,000)
• You receive: ₹4,90,000 (₹5,00,000 - ₹10,000)
• You repay: ₹5,97,860 (36 × ₹16,607)
• Actual cost: ₹1,07,860 on ₹4,90,000 received
• Effective Rate: ~14.3% (higher than stated 12%)
Prepayment and Foreclosure Rules (RBI 2026)
• Floating-Rate Personal Loans: No prepayment/foreclosure charges
• Fixed-Rate Loans: May charge 2-5% of outstanding principal
• No Lock-in Period: Prepay from the first month itself
• Any Source: Use any funds (savings, bonus, inheritance)
Note: Most personal loans are fixed-rate. Check your loan agreement for applicable charges.
Eligibility Criteria for Personal Loans
- Age: 21-60 years (salaried), 25-65 years (self-employed)
- Income: Minimum ₹15,000-25,000 monthly (varies by bank)
- CIBIL Score: 700+ preferred, 750+ for best rates
- Employment: Minimum 1-2 years total experience
- Current Job: At least 6 months with current employer
Personal Loan vs Credit Card EMI
| Factor | Personal Loan | Credit Card EMI |
|---|---|---|
| Interest Rate | 10-18% | 12-24% |
| Processing Fee | 1-3% | Usually None |
| Tenure | 1-7 years | 3-24 months |
| Amount | ₹50K - ₹40L | Based on limit |
| Best For | Large amounts, longer tenure | Small purchases, quick need |
Frequently Asked Questions (FAQs)
What documents are needed for a personal loan?
Typically required: Identity proof (Aadhaar/PAN), address proof, income proof (3-6 months salary slips), bank statements (6 months), and Form 16 or ITR. Self-employed need business proof and 2-3 years ITR.
Can I get a personal loan with low CIBIL score?
Difficult but possible. Banks typically require 700+ score. NBFCs like Bajaj Finserv, Tata Capital may approve at 650+ with higher interest rates (18-24%). Consider a co-applicant or secured loan as alternatives.
How quickly can I get a personal loan?
Digital personal loans from banks like HDFC, ICICI, SBI can be disbursed within 2-24 hours for pre-approved customers. New customers may take 2-5 working days for verification and disbursal.
Is personal loan interest tax deductible?
Generally NO for personal expenses. However, interest may be deductible if loan is used for: home renovation (Section 24), education, or business purposes. Keep documentation of end-use for claiming deduction.
Can I take multiple personal loans simultaneously?
Yes, if your income supports the EMI burden. Banks check your Fixed Obligation to Income Ratio (FOIR) - total EMIs should not exceed 50-60% of net income. Multiple loans may affect your credit score negatively.
What happens if I default on a personal loan?
Consequences include: Late payment fees, increased interest rate, negative impact on CIBIL score, harassment from recovery agents, legal action, and difficulty getting future loans. Always inform your bank about payment difficulties.