ReckonBoxHow the personal loan EMI calculator works
A personal loan EMI is the fixed monthly payment on an unsecured loan, one with no asset behind it, worked out on the reducing-balance method from the amount, the rate and the tenure. Because nothing secures it, a personal loan is priced higher than a home or car loan, and it carries fees that quietly raise what it really costs. This calculator shows the EMI and total interest, then goes further: the true rate once the processing fee and GST are counted, what closing the loan early would cost and save, and the loan your salary can carry.
Start with the headline. A ₹5,00,000 loan at 11.5% for 5 years has an EMI of ₹10,996, and across 60 months you repay ₹6,59,760, of which ₹1,59,760 is interest. That's the sticker figure. The sections below are where a personal loan differs from the secured kind.
The EMI formula
EMI is P times r times (1 + r) to the power n, all divided by (1 + r) to the power n minus 1, where P is the loan amount, r the monthly rate and n the number of months. The monthly rate is the annual rate divided by 12 and by 100, so 11.5% a year is about 0.00958 a month. Interest is charged only on the balance still outstanding, so early EMIs are mostly interest and later ones mostly principal, even though the payment never changes.
One thing to check before you trust any quoted rate: whether it is a reducing rate or a flat one. A flat rate charges interest on the full amount for the whole tenure, so it always costs more, and how much more depends on the tenure. A 12% flat rate works out at about 20.3% reducing over five years, the default here, against 21.6% over two years and 19.5% over seven. Personal loan sellers sometimes lead with the flat number because it looks smaller. The EMI calculator sets the two bases side by side across tenures.
The year-by-year repayment schedule
A repayment schedule splits every EMI into interest and principal and tracks the balance down to zero, which is the only way to see how little of the early money actually clears the loan. The calculator above prints every one of the 60 payments, grouped into years you can open, and will hand you the whole thing as a CSV or an Excel file.
On the default ₹5,00,000 at 11.5% over 5 years, the shape of it is the part worth knowing before you borrow:
- The first payment is ₹4,792 interest and ₹6,205 principal. More than two fifths of it never touches the loan.
- Across year one you pay ₹53,448 of interest to clear ₹78,510 of what you borrowed.
- By year five the identical ₹10,996 clears ₹1,24,091 and costs only ₹7,865.
- The last payment is ₹104 of interest against ₹10,892 of principal.
The EMI never changes; what it buys changes completely. Those closing balances are the same ones the foreclosure table runs on, so you can read across from either.
What extra EMIs actually do on a five-year loan
Paying extra EMIs shortens the loan, but on a five-year personal loan it returns a fraction of what the same advice delivers on a twenty-year home loan. Almost every guide to this is written for housing finance, where one extra EMI a year on a ₹50,00,000 twenty-year loan removes 41 of them.
| What you pay | Clears in | Interest saved | Extra cash you put in |
|---|---|---|---|
| Nothing extra | 60 months | none | none |
| One extra EMI a year | 55 months | ₹13,848 | ₹43,985 |
| Two extra EMIs a year | 50 months | ₹24,942 | ₹87,970 |
It is a real return, and it is not free, which is the part the general advice skips:
- Lenders typically permit a part-payment only once or twice a year.
- Most personal loans carry a lock-in of 6 to 12 months before you may prepay at all.
- A part-payment on a fixed-rate personal loan can be charged for, where a floating-rate home loan cannot.
So read the agreement for the lock-in, the permitted frequency and the charge before you plan around an extra EMI.
Reduce the EMI or reduce the tenure
Keeping the EMI and shortening the loan beats keeping the term and lowering the EMI, every time. Take a ₹50,000 part-payment after twelve EMIs, when the balance stands at ₹4,21,492:
| What you choose | What happens | Interest from here |
|---|---|---|
| Keep the EMI at ₹10,996 | the loan clears 42 months later | ₹79,538 |
| Keep the 48 months left | the EMI falls to ₹9,692 | ₹93,717 |
Holding the EMI steady saves ₹14,179 more and ends the loan six months sooner. Lowering the EMI makes sense only when the monthly cash matters more to you than the total, which is a budget decision rather than an arithmetic one.
The fee that raises your real rate
A processing fee is a one-off charge of about 1.5% to 3% of the loan, plus 18% GST, deducted before the money reaches your account. It means you're repaying as if you borrowed the full amount while receiving less than it. On the default ₹5,00,000 loan, a 2% fee is ₹10,000, which becomes ₹11,800 once GST is added, so ₹4,88,200 lands in your account. Repaying the full ₹5,00,000 schedule on ₹4,88,200 in hand lifts the effective rate from 11.5% to about 12.55%.
That gap is the number lenders rarely show. Two loans can quote the same 11.5% and cost you differently once one charges 1% and the other 3% upfront, which is why the effective rate, not the headline rate, is the figure to compare across offers.
What foreclosing early costs and saves
Foreclosure is repaying the entire outstanding balance before the tenure ends, and on a personal loan it carries a charge of about 2% to 5% of that balance plus GST, unlike a floating home loan, which cannot be charged for it. Many lenders also set a lock-in of 6 to 12 months before you may foreclose at all.
What decides this is the rate basis, not the word personal. The RBI (Pre-payment Charges on Loans) Directions, 2025 bar pre-payment charges on floating-rate loans to individuals for non-business purposes, for loans sanctioned or renewed on or after 1 January 2026, irrespective of where the money came from and with no minimum lock-in. Most personal loans in India are fixed-rate, which is precisely why the charge survives here. Published ranges vary by lender type: around 0% to 3% at public sector banks, 1% to 4% at private banks and 2% to 5% at NBFCs and fintech lenders. Closing early still tends to save interest, but the saving falls sharply as the loan ages, because less interest is left to avoid.
| Close after | Outstanding | Charge to close | Interest saved (net) |
|---|---|---|---|
| Year 1 | ₹4,21,492 | ₹19,894 | ₹86,422 |
| Year 2 | ₹3,33,464 | ₹15,740 | ₹46,652 |
| Year 3 | ₹2,34,762 | ₹11,081 | ₹18,061 |
| Year 4 | ₹1,24,091 | ₹5,857 | ₹2,004 |
The live table above runs these rungs at your own charge percent. A windfall in year one wipes out about ₹86,000 of future interest net of the fee here, while the same decision in year four barely clears the charge. Timing decides whether foreclosing is worth it, as much as the wish to be debt free.
How much your salary supports
Lenders size a personal loan against the FOIR, the fixed obligations to income ratio, and usually cap the total of your EMIs near 50% of net monthly income. Enter your take-home income and the calculator shows the EMI as a share of it and the largest loan a 50% FOIR allows. On a ₹50,000 income, that leaves ₹25,000 for EMIs, which supports close to ₹11,00,000 over 5 years at 11.5%, before the lender weighs your credit score and any running loans.
A personal loan approval leans heavily on that credit score. A score above 750 tends to unlock both a larger loan and the lower end of the rate band, while a thin file narrows both, so treat this eligibility as a planning ceiling and let the lender have the final say.
What this does not promise
The EMI uses the reducing-balance math every lender applies, and the fee and foreclosure figures follow the common market bands. Your own lender may set a different processing fee, a different foreclosure charge, or a lock-in that blocks early closure for a time, and GST rules can change. Approval, the final rate, and the sanctioned amount depend on your income, credit history and the lender's policy. This is a planning tool, not financial advice, so confirm the rate, the fees and the foreclosure terms in your loan agreement before you sign. A personal loan is the expensive way to borrow, so it is worth checking it against what a secured home loan charges and against closing the balance early instead.
Frequently asked questions
What is a personal loan EMI calculator? A personal loan EMI calculator works out the fixed monthly installment on an unsecured personal loan from the amount, the interest rate and the tenure, using the reducing-balance method. A ₹5,00,000 loan at 11.5% for 5 years has an EMI of ₹10,996 and about ₹1,59,760 of total interest.
What is the personal loan EMI formula? The EMI formula is EMI = P times r times (1 + r) to the power n, divided by (1 + r) to the power n minus 1, where P is the loan amount, r is the monthly rate (the annual rate divided by 12 and by 100) and n is the tenure in months. Interest is charged on the reducing balance, so each EMI is part interest and part principal.
What interest rate do personal loans charge? Personal loan rates in India run about 10% to 24% a year, higher than home or car loans because a personal loan is unsecured, with no asset backing it. The exact rate depends on your credit score, income and employer, so a score above 750 tends to fetch the lower end of the band.
How much personal loan can I get on my salary? Lenders cap the total of your EMIs at about 50% of net monthly income, a limit called the FOIR, so a higher income supports a larger loan at the same rate and tenure. On a ₹50,000 take-home income, a 50% FOIR leaves ₹25,000 for EMIs, which supports roughly ₹11,00,000 over 5 years at 11.5%, before the lender checks your credit score and existing loans.
How does the processing fee change the real cost? A personal loan carries a one-off processing fee, usually 1.5% to 3% of the loan, plus 18% GST on that fee, and it is deducted before the money reaches you. On a ₹5,00,000 loan a 2% fee is ₹10,000, which becomes ₹11,800 with GST, so you receive ₹4,88,200 but repay as if you borrowed the full ₹5,00,000. That lifts the effective rate here from 11.5% to about 12.55%.
What does it cost to foreclose a personal loan early? Foreclosing a personal loan means repaying the whole outstanding balance ahead of schedule, and lenders usually charge 2% to 5% of that balance plus 18% GST, often only after a lock-in of 6 to 12 months. Closing early still tends to save interest, but the saving shrinks as the loan ages: on the default loan, closing after year 1 saves about ₹86,000 net, while closing after year 4 saves only about ₹2,000.
Is a part-payment allowed on a personal loan? Many lenders allow a part-payment, where you pay a lump sum toward the principal without closing the loan, though some charge a fee of a few percent on the amount prepaid. A part-payment cuts the outstanding balance and every future interest charge on it, so the loan finishes sooner or the EMI falls.
How do I read a personal loan repayment schedule? A repayment schedule splits each EMI into the interest charged on the balance you still owe and the principal that actually clears the loan, then carries the balance forward. On a ₹5,00,000 loan at 11.5% over 5 years, the first payment is ₹4,792 interest against ₹6,205 principal, year one pays ₹53,448 of interest to clear ₹78,510, and by year five the same ₹10,996 clears ₹1,24,091 for ₹7,865 of interest. The EMI is identical throughout, so the schedule is the only way to see the split change. The calculator prints all 60 payments and downloads them as CSV or Excel.
What happens if I pay 2 extra EMIs every year? On a ₹5,00,000 personal loan at 11.5% over 5 years, two extra EMIs a year clear it in 50 months instead of 60 and save ₹24,942 of interest, for ₹87,970 of extra cash put in. One extra EMI a year clears it in 55 months and saves ₹13,848. The effect is much smaller than on a long home loan, and on a personal loan it is not automatic: lenders usually allow a part-payment only once or twice a year, often after a lock-in of 6 to 12 months, and a fixed-rate loan can be charged for it.
Is it better to reduce the EMI or the tenure after a part payment? Keeping the EMI and shortening the loan saves more. After a ₹50,000 part-payment twelve EMIs into a ₹5,00,000 loan at 11.5%, holding the EMI at ₹10,996 clears the balance in 42 more months with ₹79,538 of interest, while keeping the original 48 months and letting the EMI fall to ₹9,692 costs ₹93,717. Holding the EMI saves ₹14,179 more and finishes six months earlier, so lower the EMI only if the monthly cash matters more than the total.
What is the difference between a flat and a reducing rate? A reducing-rate loan charges interest only on the balance still outstanding, while a flat-rate loan charges interest on the full amount for the whole tenure, so the same flat number costs far more. How much more depends on the tenure: 12% flat is about 20.3% reducing over five years, 21.6% over two years and 19.5% over seven. Confirm both the basis and the tenure before comparing offers.
Sources
- Reserve Bank of India (Pre-payment Charges on Loans) Directions, 2025
- IIFL, personal loan prepayment charges by lender type, lock-in and part-payment frequency
- Upstox, prepaying or foreclosing a personal loan, fixed against floating
- ClearTax, personal loan eligibility and the 50% FOIR method
- ClearTax, SBI personal loan rates, processing fee and GST
- L&T Finance, personal loan foreclosure and part-payment charges
- Reserve Bank of India, lending and interest rate framework