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Personal Loan Calculator

Personal loan is a popular type of loan available in India. This loan is not limited to any specific usage, that is, it can be used for meeting any type of personal financial needs such as marriage expenses, emergency medical expenses, home renovation, travel abroad plans, etc.

Loan amount
₹
Rate of Interest (p.a)
%
Loan Tenure
Years Months

Principal Amount

Interest Amount

Monthly EMI:
Principal Amount:
Interest Amount:
Total Amount Payable:
Fixed ROI:

Your Amortization Details (Yearly/Monthly)

Personal Loan EMI Calculator

How it Works and Formula

Technically there are two types of personal loan interest calculations: the flat interest rate method and the reducing balance method.

Flat Interest Rate Method

In this method, personal loan interest is calculated on the entire amount that you have borrowed. What it means is that even while you are paying the EMIs, the lender continues to charge interest on the original principal amount. The total interest is divided across EMIs throughout the loan tenure.

Formula:

Total Interest = (Loan Amount × Interest Rate × Loan Tenure) / 100

For example:

Loan amount = ₹5,00,000
Interest rate = 12% per annum
Tenure = 5 years
Total Interest = (5,00,000 × 12 × 5) / 100 = ₹3,00,000
You will repay the Principal (₹5,00,000) +Interest (₹3,00,000), which totals ₹8,00,000.

Reducing Balance Method:

In this method, the interest is calculated on the remaining principal amount after deducting each EMI as you pay it. This means the interest component of the EMI decreases as the outstanding principal reduces.

Formula:

EMI = [P × r × (1+r)^n] / [(1+r)^n – 1]

Where:
P = Principal amount.
r = Monthly interest rate (annual interest rate/12)
n = Number of EMIs

For example:

Loan amount = ₹5,00,000
Interest rate = 12% per annum (or 1% per month)
Tenure = 5 years

Using the formula shown above, the EMI will be ₹11,122 and the total interest paid will be ₹1,67,320 which is lower than the one charged in the flat interest rate method.

Most lenders in India offer loans with the reducing balance method, which is more favorable for borrowers as it results in lower overall interest payments.

Personal Loan Interest Rates

The interest rate on a personal loan can vary based on the lender's policies and factors such as your credit score, income, employment status, etc. Currently, personal loan interest rates start at around 10% to 12% per annum.

Fixed vs. Floating Interest Rates:

Fixed interest rates remain the same throughout the tenure of your personal loan. They are opted by people who want to have a predictable EMI payment. Floating interest rates vary depending on the Marginal Cost of Funds-based Lending Rate (MCLR). In India, lenders generally offer fixed interest rate personal loans.

Personal Loan Eligibility Calculator

Personal loan eligibility is decided based on factors such as credit score, age, income, and your repayment capacity. Before applying for a personal loan, you should check whether you meet the eligibility criteria set by the lender to avoid any rejections.

You can find personal loan eligibility factors online that take into account following parameters:

Monthly Income

Lenders usually prefer salaried applicants who have a minimum monthly income of ₹15,000 to ₹30,000. The amount can be higher for self-employed individuals. The exact income criteria may change based on the lender’s policies.

Existing Loans and EMIs

You need to enter the amount of your existing loans and EMIs in the eligibility calculator. This information is used by lenders to check your Debt-to-Income (DTI) ratio which basically compares your monthly debt payments to your gross monthly income.

Repayment Tenure

The personal loan calculator requires you to enter the tenure of repayment you are most comfortable with.

Based on the details entered by you, the personal loan calculator will show a tentative personal loan amount you can apply for. The actual personal loan amount is decided by the lender based on a detailed analysis of your application.

Factors Affecting Personal Loan EMI

Income

Having a higher and steady income can increase your chances of personal loan approval and help you become eligible for better personal loan interest rates.

Repayment history

A consistent repayment history indicates you are a reliable borrower. It can help you get a personal loan at lower interest rates.

Credit score

A high credit score is an indicator of your creditworthiness. A credit score above 750 can help secure the best personal loan rates and offers.

Debt-to-income ratio

The ratio of your current liabilities to your gross income, also known as the debt-to-income ratio plays a big role in determining your risk profile. Lenders prefer a low debt-to-income ratio.

Defaults if any

If you have a history of any loan default mentioned on your credit report, you may struggle getting a personal loan approval or a loan with good interest rates.

Personal Loan Top Banks & NBFCs

Personal loan is made available by almost all banks and NBFCs in India. You can check your options online to compare the interest rates, flexibility of repayment and documentation required before choosing a lender. Following are some of the best personal loan offers you can consider:

L&T Finance Limited

Avail personal loan up to ₹10 Lakhs

apply now

Aditya Birla Finance Limited

Avail personal loan up to ₹5 Lakhs

apply now

Niro Money

Avail personal loan up to ₹4,87,000

apply now

Fibe (EarlySalary Services Pvt. Ltd.)

Avail personal loan up to ₹4 Lakhs

apply now

Apply for a personal from these top lenders directly via the Moneycontrol app and website.

Instant disbursal
Minimal documentation
100% digital process

Here’s to apply for a personal loan on Moneycontrol

Enter your
Personal details
Complete your KYC
Set up EMI repayment

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How to Apply for a Personal Loan

Step-by-Step Guide

Applying for a personal loan in India is a straightforward process, especially when you apply through a digital lending platform.

Here are the general steps you need to follow to apply for a personal loan through any platform:

step 1

Research and Compare Lenders

Do a thorough research on the different personal loan options you have and compare the offerings based on interest rates, processing fees, ease of application and more.

step 2

Gather the Required Documents

Typically, you’ll need the following documents to apply for a personal loan:

Identity Proof (Aadhar, PAN or passport)
Address Proof (Utility bills, Passport, Rent agreement)
Income Proof (Salary slips, Bank Statements, ITR)

step 3

Submit Your Application

The easiest way to apply for a personal loan is via the online method. If you prefer applying for a loan offline, you can visit the branch of your chosen lender. Next, you need to fill out the application form, submit or upload your documents, and wait for an approval.

step 4

Loan Approval and Disbursement

When your application is approved, the loan amount will be disbursed to your bank account or UPI ID.

Frequently Asked Questions

Which bank is best for a personal loan?

The best bank or NBFC for a personal loan in India depends on factors like the loan amount required, interest rates, maximum tenure available, processing fees, and eligibility criteria. Online platforms such as Moneycontrol offer some of the best personal loans with low interest rates, minimal documentation and instant disbursal.

How to Calculate EMI on Personal Loan?

Personal Loan EMI is calculated either using a flat interest rate method or reducing balance method. In the case of reducing balance method, the EMI is calculated using the following formula: EMI = [P x R x (1+R)^N] / [(1+R)^N-1], where P is the loan amount, R is the monthly interest rate, and N is the loan tenure in months. You can use the personal loan EMI calculator above to calculate the tentative EMI amount for your personal loan.

How much EMI will I pay for ₹1 lakh loan?

The EMI for a ₹1 lakh personal loan depends on the interest rate, interest calculation method and repayment tenure. For example, with an interest rate of 12% and a tenure of 12 months, the EMI would be approximately ₹8,885 per month using a reducing balance method. Similarly, you can calculate the EMI for any personal loan amount such as ₹2 lakhs, ₹5 lakhs or even ₹10 lakhs using the personal loan EMI calculator above.

Who are eligible for ₹2 lakh instant personal loan?

Eligibility for a ₹2 lakh personal loan depends on factors such as monthly income, credit score, and employment status. Most lenders require borrowers to be between 21-60 years old with a stable income and a credit score preferably above 750.

What is the minimum salary for a ₹3 lakh loan?

The minimum salary required for a personal loan is typically in the range of ₹15,000 to ₹30,000 per month. Do check the particular lender’s policies before applying for a personal loan.

How to reduce personal loan EMI?

You can reduce your personal loan EMI by choosing a higher loan repayment tenure, making prepayments or negotiating a lower interest rate with your lender. You can also explore refinancing options if available.

Can my Personal Loan EMI change during the loan tenure?

Typically a personal loan EMI will change only if you make partial prepayment, negotiate a lower interest rate or refinance your loan. However, availability of all these options depends on the lender’s policies.

Is 12% a good personal loan rate?

Personal loan rates vary based on the lender’s policies and factors such as your credit score, income, loan amount and tenure. Having said that, the best personal loan interest rates available in India are in the range of 10% to 12% currently. Do compare your options before making a decision.

How can I get a personal loan EMI at low interest rates?

By building and maintaining a high credit score you have better chances of getting a personal loan at the best available interest rates.

How to repay personal loan EMI?

Personal loan EMI can be paid via auto-debit from bank (eNACH), UPI, netbanking or via post-dated cheques. The options available may vary based on the lender’s policies.

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