Personal Loan

Contents

1 Personal Loan EMI Calculator — Monthly Payment & Total Cost

Personal Loan EMI Calculator — Monthly Payment & Total Cost

Calculate personal loan EMI for any bank or NBFC. Enter loan amount, rate and tenure. No collateral required.

No CollateralCIBIL Score ImpactForeclosure

Visual Breakdown

EMI Breakdown

Principal

Interest

Personal Loan Interest Rates — Indian Banks

Lender	Salaried Rate	Self-Employed Rate	Max Tenure
SBI Xpress Credit	11.05-15.55%	NA (only salaried)	6 years
HDFC Bank	10.85-21.50%	11.40-21.50%	6 years
ICICI Bank	10.80-19.25%	11.80-22.50%	5 years
Axis Bank	11.25-22.00%	13.00-24.00%	5 years
Bajaj Finserv	11.00-32.00%	14.00-32.00%	5 years
Aditya Birla Finance	12.00-26.00%	14.00-28.00%	5 years
Tata Capital	11.99-26.00%	13.99-28.00%	5 years

Personal loan rates depend heavily on CIBIL score, employer category (PSU, top MNC, mid-tier), salary level, existing relationship with bank, and loan amount.

Personal Loan vs Other Borrowing Options

Source	Interest Rate	Processing Time	Best For
Personal Loan	11-22%	1-3 days	Quick cash, no collateral needed
Credit Card Withdrawal	30-45%	Instant	Avoid — extremely expensive
Credit Card EMI	14-22%	Instant	Single large purchase
Loan Against FD	FD rate + 1-2%	Same day	If you have FDs (don’t break them)
Loan Against Securities	9-12%	2-3 days	Have MF/stocks worth 2x loan amount
LAP (Loan Against Property)	9-12%	2-4 weeks	Own property; large amount, long tenure
Gold Loan	8-15%	30 min – 1 hour	Have gold; short-term need
Top-up Home Loan	8.5-10%	1 week	Existing home loan customers

Avoid personal loans when alternatives exist. Loan against FD/securities/gold typically costs 30-50% less in interest. Use personal loan only for genuine emergencies without other collateral.

Hidden Costs of Personal Loans

Processing Fee: 1-3% of loan amount (₹3K-15K typically). Non-refundable.
GST: 18% on processing fee.
Foreclosure / Prepayment Penalty: 2-5% on outstanding principal. RBI banned this for floating-rate personal loans in 2019, but most personal loans are FIXED rate.
Cheque Bounce / ECS Failure: ₹500-1,000 per occurrence + late payment interest.
Late Payment: 2-3% per month on overdue amount.
Documentation Fee: ₹500-2,000 one-time.
Stamp Duty: Negligible but applies on loan agreement.
Insurance Premium: Often sold during loan approval (₹2K-15K). NOT mandatory — can be declined.

Personal Loan Eligibility Criteria

Criterion	Typical Requirement
Age	21-58 years (some lenders 65)
Minimum Monthly Income	₹15,000-50,000 (metro)
Employment Type	Salaried preferred; self-employed need 2-3 yr ITR
Employment Stability	Current job 1+ year; total work 2+ years
CIBIL Score	650+ minimum; 750+ for best rates
Existing EMI to Income Ratio	< 50%
Maximum Loan	₹40 lakh (most lenders); ₹50L for top-tier MNCs/PSUs

Worked Examples

Example 1: ₹5 Lakh Personal Loan, 3 Years, 12%

EMI = ₹16,607. Total Interest = ₹97,852. Total Repayment = ₹5,97,852. Effective annual rate (after 1.5% processing fee): 12.6%.

Example 2: ₹10 Lakh @ 15% vs Loan Against FD

Personal Loan ₹10L @ 15% for 5 yr: EMI ₹23,790. Total Interest ₹4.27L. Loan Against FD (₹10L FD at 7%, loan @ 8.5%) for 5 yr: EMI ₹20,517. Total Interest ₹2.31L. Plus FD continues earning ₹50K/yr. Loan against FD saves ₹2 lakh in interest + keeps FD intact.

Example 3: Wedding Loan vs Savings Withdrawal

₹15L wedding expense. Option A: Personal loan ₹15L @ 13% for 4 yr → EMI ₹40K, Interest ₹4.2L. Option B: Use ₹15L from FD/MF (paying tax on gain). Better if return on those investments < 9%. Worse if > 13%.

More FAQs

Can I prepay personal loan?

Yes, but most lenders charge 2-5% foreclosure penalty (RBI ban on prepayment penalty applies only to floating-rate; personal loans are typically fixed). Compute break-even before prepaying.

Does personal loan affect credit score?

Yes — initially drops 30-50 points on enquiry + new account. Improves with consistent EMI payments. Default ruins score for 7 years.

Are personal loans tax-deductible?

Generally no. Exception: if loan is taken for income-tax-deductible purpose (home repair, education, business), interest may qualify under Section 80E (education) or as business expense.

Can I top-up an existing personal loan?

Yes — most lenders allow top-up after 12 months of regular EMI payments. Same rate or slightly lower. No fresh documentation in many cases.

Pre-approved vs regular personal loan?

Pre-approved (offered to existing bank customers): faster approval (4-24 hrs), lower processing fee (often 0). Regular: 1-3 days. Always check both — pre-approved may have higher rate due to convenience pricing.

What is a flexi personal loan?

Loan with revolving credit feature. Withdraw as needed; pay interest only on used amount. Like a credit card but at personal loan rates. Useful for variable cash needs.

Can NRIs take personal loans in India?

Yes — NRE/NRO account holders can avail personal loans from select banks (HDFC, SBI, ICICI). Higher interest rates due to perceived risk. Documentation more complex.

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