₹5 lakh, 12.5%, 3 years, 2% fee
EMI ₹16,727. Interest ₹1,02,165. Fee with GST ₹11,800, so you receive ₹4,88,200. Effective rate about 14.17%.
Personal loan EMI calculator
A reducing-balance loan. The processing fee is deducted from what you receive, with 18% GST on the fee. The effective rate is the monthly rate that makes what you receive equal to the EMIs you pay, times 12.
5 lakh
%
years
%
Monthly EMI
₹16,727
You receive ₹4,88,200 after the fee and repay ₹6,02,165. The effective rate is 14.17%, not 12.5%.
- Total interest
- ₹1,02,165
- Fee with GST
- ₹11,800
- Effective rate
- 14.17%
What a personal loan really costs
A personal loan is unsecured, so lenders price it high and add fees. The number on the advertisement is the nominal rate. What matters is what it costs you across the whole loan once fees are counted.
Borrow ₹5 lakh at 12.5% for 3 years with a 2% processing fee. The EMI is ₹16,727, and you will repay ₹6.02 lakh, which is ₹1.02 lakh of interest. The 2% fee is ₹10,000, plus 18% GST of ₹1,800, so ₹11,800 comes off the top and you get ₹4,88,200. Because you are repaying ₹5 lakh worth of EMIs for ₹4.88 lakh of cash, the effective rate is about 14.17%.
Two levers matter. One is tenure. A 5-year loan lowers the EMI but raises interest sharply, so stretch only if cash flow demands it. The other is comparison: ask for the total payable and the effective rate from each lender, not just the headline rate.
Before taking one, check that the EMI stays under about 40% of take-home pay across all your loans together. Lenders look at the same thing, and a lower ratio gets a better rate.
Sources
What this calculator does not account for
- Insurance add-ons and late fees.
- Foreclosure charges.
- Rate changes if your loan floats.
How this is calculated
Formula: EMI and effective rate
EMI =P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1)What the symbols mean
- PLoan amount.
- rMonthly rate, which is the yearly rate ÷ 12.
- nNumber of monthly instalments.
Good to know
- The fee plus 18% GST is taken from the loan before it reaches you, so you borrow ₹P but receive less.
- The effective rate is the monthly rate that equates what you received with the EMIs, times 12.
Read the full methodologyFound an error? Contact us
Worked examples
Each example is worked out by the same code as the calculator above.
Embed this calculator
The frame shows the tool only.
<iframe src="/embed/personal-loan-emi-calculator" title="Personal loan EMI" width="100%" height="720" style="border:0;max-width:42rem" loading="lazy"></iframe>Questions
Why is the effective rate higher than the quote?
Because you pay interest on the full loan but receive less after the processing fee. The fee also attracts 18% GST.
What is a good personal loan rate in India?
Banks commonly quote around 10% to 16% for good credit, and NBFCs and apps charge 18% or more. Your score and salary decide.
Can I close a personal loan early?
Usually yes, but many lenders charge 2% to 5% as foreclosure. Ask before you sign.
How long should the tenure be?
Shorter means a higher EMI and much less interest. Pick the shortest tenure whose EMI is comfortable.