Plan your personal loan before you apply. Enter the loan amount, interest rate and tenure to see your monthly EMI, total interest and total amount payable.
1. Enter the loan amount you want to borrow. 2. Enter the yearly interest rate. 3. Enter the tenure in years and click Calculate Loan EMI.
A personal loan is money you borrow from a bank for almost any purpose: a wedding, home repairs, medical bills, education or consolidating other debts. Unlike a home loan, a personal loan usually needs no security, but the interest rate is higher, often between 10 and 25 percent a year. Before you apply, you should know exactly what the monthly EMI will be and how much total interest you will pay. This free personal loan calculator gives you both answers in seconds, so you can check whether the loan fits your monthly budget.
Personal loans are repaid in equal monthly instalments, called EMIs, over a fixed period, usually 1 to 5 years. Each EMI has two parts: interest and principal. In the early months most of the EMI goes to interest, and slowly more of it goes to the principal. That is why a longer loan feels cheaper every month but costs much more in total interest. Try different tenures in the calculator and compare the total interest before you choose.
Suppose you borrow 500,000 at 12 percent per year for 5 years (60 months). This personal loan calculator gives a monthly EMI of about 11,122. Over 60 months you will pay about 667,333 in total, which means about 167,333 is interest. That is one third of the amount you borrowed, paid as interest alone. Now try a shorter tenure: the same loan over 3 years gives an EMI of about 16,607, but the total interest falls to about 97,840. The monthly payment is higher, but you save almost 70,000 in interest.
Take a smaller loan at a higher rate: 300,000 at 15 percent per year for 4 years (48 months). The monthly EMI is about 8,349, the total payment is about 400,763, and the total interest is about 100,763. Notice how a higher rate makes a big difference: even though this loan is smaller than the first example, the interest is still more than 100,000. Always compare the interest rate from two or three banks before you apply, because even 2 percent less can save you tens of thousands.
The EMI is calculated with this formula: EMI = P x r x (1 + r)^n / ((1 + r)^n - 1). Here P is the loan amount, r is the monthly interest rate (the yearly rate divided by 12 and by 100), and n is the number of monthly payments. For the first example, r is 12 divided by 1,200, which is 0.01, and n is 60. The total interest is the EMI times n, minus the loan amount. This is the reducing balance method, which almost all banks use for personal loans.
Borrow only what you need. A bigger loan means a bigger EMI and more interest, so do not borrow extra just because the bank offers it. Choose the shortest tenure you can afford. A shorter loan costs much less interest in total. Compare rates from several banks. A rate that is 2 percent lower can save a large amount over 5 years. Check the processing fee. Banks often charge 1 to 3 percent of the loan as a fee, which adds to your cost. Keep EMIs below 40 percent of your income. If your total EMIs are higher, one emergency can make payments very hard.
Looking only at the EMI. A low EMI over a long period means much more total interest, so always check the total interest too. Entering years as months. This calculator needs years; 5 years is 60 months in the maths, but you enter 5. Ignoring the processing fee. A 2 percent fee on 500,000 is 10,000 extra, so add it to your cost. Borrowing to pay off another loan. Taking a new loan to pay an old one often makes the debt bigger, not smaller. Applying to many banks at once. Every application can affect your credit score, so compare rates first and apply to one or two banks only.
Pro Tip: If you can pay one extra EMI per year, a 5-year loan can finish months early and save you a large amount of interest.
Note: This calculator shows an estimate using the reducing balance method. Your bank may add processing fees, insurance or taxes that are not included here.
What is a personal loan? A personal loan is an unsecured loan from a bank or lender that you can use for almost any purpose, such as a wedding, medical bills, education or home repairs. No security or collateral is needed.
How is the personal loan EMI calculated? The EMI uses the 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 number of months. This calculator does it for you.
What is a good interest rate for a personal loan? It depends on your country, bank and credit score. In Pakistan, personal loan rates are often between 15 and 25 percent a year. A better credit score usually gets a lower rate.
Does a longer tenure reduce my EMI? Yes, a longer tenure gives a lower monthly EMI, but you pay much more total interest. A shorter tenure has a higher EMI but costs less overall.
Can I pay off my personal loan early? Most banks allow it, but some charge a prepayment penalty of 1 to 5 percent of the remaining amount. Ask your bank before you prepay.
What documents do I need for a personal loan? Usually salary slips or bank statements, your ID card, proof of address and sometimes tax returns. Self-employed people may need extra business documents.
Will a personal loan affect my credit score? Yes. Paying EMIs on time improves your score, while missing payments harms it. A rejected application can also leave a mark, so apply carefully.
Is this calculator's result the same as my bank's? It should be very close if the bank uses the reducing balance method. Small differences can come from fees, insurance or the exact start date of the loan.
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