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Personal loan calculator

Work out the monthly payment on a personal loan, and what it really costs once the processing fee is counted.

  • Free, no sign-up
  • Formula shown
  • Runs on your device
  • Any currency
₹
The amount the loan is for, before any fee.
% a year
The yearly rate the lender quotes. 0% to 50%.
years
1 to 10 years.
%
Share of the loan the lender keeps upfront. 0% to 10%.
Monthly payment
₹16,607.15

Borrowing ₹5,00,000 for 3 years at 12% costs ₹16,607.15 a month. With a ₹10,000 fee you receive ₹4,90,000, so the effective rate is about 13.41% a year.

What the loan costs
Money you receive₹4,90,000
Interest₹97,858
Processing fee₹10,000
Effective yearly rate13.41%
Total cost of borrowing₹1,07,858
Then change the inputs to compare two options side by side.

See what paying early would save

Illustrative estimate. Assumes a fixed rate, equal payments at the end of each month and the fee taken from the loan upfront. Taxes on fees, insurance and prepayment charges are not included. Check the lender's figures.

Repayment by year

050,0001 lakh1.5 lakh2 lakh123
Principal repaidInterest paid
YearPrincipalInterestBalance
1₹1,47,208₹52,078₹3,52,792
2₹1,65,877₹33,408₹1,86,915
3₹1,86,915₹12,371₹0

How it's calculated

EMI = P × r × (1 + r)^n ÷ ((1 + r)^n − 1) Effective rate: the yearly rate at which the EMIs repay only P − fee

P is the loan, r the yearly rate ÷ 12 and n the number of months. The fee is kept by the lender, so you receive less than you repay on; the effective rate is found by trying rates until the EMIs match the money received.

Assumptions

  • A fixed rate and equal payments at the end of each month.
  • The fee is taken from the loan when it is paid out.
  • Taxes on the fee, insurance and prepayment charges are not included.

Worked example

A 5,00,000 rupee loan at 12% for 3 years costs 16,607 rupees a month. With a 2% fee you receive 4,90,000 rupees, so the effective rate is about 13.4% a year.

Questions

Why is the effective rate higher than the quoted rate?

The fee comes out of the loan, but you repay interest on the full amount. Paying the same EMIs for less money is a higher rate.

Does a longer tenure cost more?

Usually. The EMI is smaller, but interest runs for longer. Compare tenures with the shorter or longer loan page.

Can I pay off a personal loan early?

Often, sometimes with a charge. The prepayment page shows the interest an early payment could save.

Sources

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