Personal Loan Calculator

Personal loans are unsecured — there's no collateral or asset backing the loan that the lender can claim if you default. Home and car loans are secured against the property or vehicle, which gives the lender recourse and lowers their risk. That extra risk on an unsecured loan is priced into a higher interest rate, typically 10.5% to 24% per annum compared to 7.5% to 13% for most secured loans.

The processing fee, typically 1% to 3% of the loan amount, is deducted by the lender before the loan is disbursed to your account. Your EMI is still calculated on the full loan amount you borrowed, not on the lower net amount you actually receive — so the processing fee is a pure upfront cost with no offsetting reduction in your repayment obligation. If you need a specific amount in hand, you'll need to borrow somewhat more to cover this gap.

Yes, commonly. Unlike floating-rate home loans, which RBI rules protect from prepayment penalties, personal loans typically do carry a prepayment penalty, usually 2% to 5% of the outstanding principal at the time of the early payment. This penalty is deducted from the interest you'd otherwise save, so the net benefit of prepaying is smaller than the gross interest saved — always check the net figure, not the gross one, before prepaying.

Usually yes for larger prepayments made reasonably early in the loan, since the interest saved on the remaining tenure typically far exceeds the one-time penalty. It's less clearly beneficial for very small prepayments made very late in the loan, where there's little remaining interest left to save. This calculator nets the penalty against the interest saved automatically, so you can check the actual "Net Interest Saved" figure for your specific prepayment amount and timing before deciding.

Most Indian banks use a 40% FOIR (Fixed Obligation to Income Ratio) guideline for personal loans — your total EMI obligations across all existing and new loans generally should not exceed about 40% of your gross monthly income. This calculator's minimum income figure applies that benchmark to your chosen EMI. If your income falls short, consider a smaller loan amount or a longer tenure to reduce the monthly EMI.

While exact thresholds vary by lender, a credit score above roughly 750 generally qualifies for the better end of the rate range, while scores below 650 often face higher rates or rejection. Because personal loans are unsecured, your credit score carries more weight in pricing the rate than it does for secured loans like home or car loans, where the collateral itself reduces the lender's reliance on your credit history alone.

For an expense you can't repay within the credit card's interest-free period, a personal loan is usually cheaper — credit card revolving interest commonly runs 30% to 45% per annum if the balance isn't cleared, well above even the higher end of personal loan rates. A personal loan's fixed EMI and defined tenure also provide more predictable repayment than an open-ended revolving balance, which can be easy to let grow.

Missing an EMI typically triggers a late payment fee from the lender and, more significantly, is reported to credit bureaus, which can lower your credit score and affect future loan approvals. Since personal loans are unsecured, lenders have no asset to recover, so consistent repayment history matters even more for maintaining access to future credit. If you anticipate difficulty paying an EMI, contacting your lender proactively is generally better than missing the payment silently.