Personal Loan EMI Calculator

Personal Loan helps you to take Loan without any collateral / guarantee to be provided by you, but at an additional cost of high interest rate. Unlike home loan, where your house is used as collateral, Personal Loan does not need any collateral and helps you to borrow money from bank. Use below Personal Loan EMI Calculator to calculate the EMI and Total Interest Amount.

Save Home Loan Interest Amount!

Use Home Loan Excel Calculator that will help you to Save Interest Amount on Home Loan EMI.
Click below button to download Home Loan EMI and Prepayment Calculator in Excel:

Watch how Home Loan Calculator in Excel Works

What is Personal Loan?

Personal Loan is money that you borrow from banks or Financial Institutions to cover for expenses that can include medical expenses, wedding costs, travel plans, Education Fees, Personal Debt Payments, etc. without the need of a collateral or guarantee. The fact that you don’t have to use any collateral or guarantee in this type of Loan makes it a Personal Loan.

The only drawback of Personal Loan compared to Home Loan, Car Loan or Bike Loan is that – Personal Loan is provided to you at high interest rates compared to other types of loans. So, if you can afford to pay the EMI along with interest amount, you can take Personal Loan in case you need it without having to use any collateral.

Below are some of the Key features of Personal Loans:

Quick approval and disbursal – Banks are ready to provide your Personal Loan as soon as possible as they get maximum interest amount in this type of Loan
No need to pledge property or assets
Flexible usage — you can spend it on anything, No Questions Asked, but you need to pay it back in the form of EMIs
Fixed monthly repayment schedule

ALSO READ: 7 Home Loan Mistakes You Should Avoid

How Personal Loan EMI Calculation Works?

EMI stands for Equated Monthly Installment. It is the fixed amount you pay every month until the loan is fully repaid. You can easily calculate the Personal Loan EMI Amount using the above calcuator.

It helps you to understand the EMI amount and the total Interest amount you will be paying throughout the tenure.

Personal loan EMI can be easily calculated in excel using PMT function, or you can also use the above calculator to quickly calculate home loan EMI
PMT function takes 3 parameters: Interest Rate, Remaining months and Principal value remaining
Interest rate provided should be the monthly Personal loan interest rate divided by 100
Remaining months is the number of months remaining for which EMIs are yet to be paid
Principal value is the outstanding principal amount remaining in your loan account
Remember, your EMI consists of 2 things: Principal Amount and Interest Amount
Interest Amount is high initially, and decreases with time
Principal Amount is low initially, and increases with time

Components of Personal Loan EMI

Basically there are 2 components of loan EMI – Principal Amount and Interest Amount
Principal amount is low initially and increases with time
Interest amount is high initially and decreases with time
Majority of Interest amount is paid by you during the first half of your loan tenure
As you move towards your loan closure by paying all EMIs on time, very less interest if left to be made making it difficult to save loan interest using loan prepayment option
Thus, it is recommended that if you are making loan prepayments to save interest, make the payments during initial half of the loan so that you can save maximum interest on your loan
Car Loan EMI is also calculated in same way as above

Difference between Personal Loan and Home Loan

Below is the table of Personal Loan vs Home Loan Differences:

Feature	Personal Loan	Home Loan
Loan Type	Unsecured, no collateral is required.	Secured, the property itself serves as collateral.
Loan Purpose	Flexible usage for various needs, such as medical emergencies, weddings, debt consolidation, travel, or home renovation.	Used specifically for buying, constructing, or renovating a residential property.
Interest Rate	Higher, as the lender takes on more risk without collateral.	Lower, because the loan is secured by a valuable asset.
Loan Amount	Typically smaller, with borrowing limits based on your income and creditworthiness.	Much higher, with the amount determined by the property’s value.
Repayment Tenure	Shorter, typically ranging from 1 to 5 years.	Longer, often 15 to 30 years, to make monthly payments more manageable.
Processing Time	Faster, with a simpler application process, making it suitable for urgent needs.	Longer, due to thorough checks like property valuation, legal verification, and extensive documentation.
Tax Benefits	Generally, no tax benefits. However, deductions may be available if the loan is used for a specific purpose, such as funding a business.	Significant tax benefits are available on both the principal and interest components of the loan under Section 80C and Section 24(b) of the Income Tax Act.
Risk of Default	Non-repayment can damage your credit score and result in legal action, but your assets are not at risk.	If you default, the lender can seize and sell the property to recover the outstanding loan amount.

When buying a Car, should you take Personal Loan or Car Loan?

Both loans serve different needs:

Personal Loan:
- Flexible usage (can buy a car, pay medical bills, etc.)
- Higher interest rates
- No collateral required
Car Loan:
- Specifically for buying a car
- Lower interest rates compared to personal loans
- Car itself is collateral

So, it depends on your Goal – if you want freedom to use money for multiple purposes, go for a personal loan. If your only goal is buying a car, a car loan is cheaper.

Personal Loan Interest Rates

Interest rates of Personal Loan can vary based on:

Your credit score
Income level
Loan amount
Bank policies

Typical interest rates in India:

Public sector banks: 10–14%
Private banks: 12–24%
NBFCs (Non-Banking Financial Companies): 14–28%

Tip: Always compare interest rates before applying. Even a 1% difference can save thousands of Loan Interest Amount over the loan tenure.

How Interest is Calculated on Personal Loan

Banks use reducing balance method for personal loans. This means interest is charged only on the outstanding principal amount, not the original loan amount. So, every month the EMI amount that you pay helps you to reduce the Principal Amount on your Loan, which is used to calculate the interest amount for the next month, and the process continues.

Example:

Loan = ₹1,00,000
Interest = 12% per year
EMI = ₹3,321 for 36 months
Total Interest = ₹19,572

In the first month, interest is charged on ₹1,00,000. After you pay EMI, the principal reduces. Next month, interest is charged on the reduced principal balance.

This method ensures you pay less interest as the loan progresses.

How to Save Personal Loan Interest Amount

There are multiple ways to Save the Interest Amount on your Personal Loan:

Choose shorter tenure: Longer tenure means more interest.
Make part-prepayments: Pay extra whenever possible to reduce principal.
Compare lenders: Don’t settle for the first offer. Check for other lenders that provides Loan at low interest rates
Maintain good credit score: Higher Credit score = lower interest rate. Credit score helps banks to understand your loan repayment capabilities and history
Negotiate with bank: If you are a loyal customer, ask for better terms and lower interest rates

Frequently Asked Questions

Q1. What is the minimum EMI I can get on a personal loan?
It depends on loan amount, tenure, and interest rate. Use the calculator above to check the Loan EMI amount you need to pay every month.

Q2. Can I prepay my personal loan?
Yes, most banks allow Personal Loan Prepayment. Some may charge a small penalty.

Q3. Is personal loan better than credit card?
For large expenses, personal loan is better because interest rates are lower than credit cards. But other loans like Home Loan, Car Loan or Bike Loans have lower interest rates compared to Personal Loan

Q4. How fast can I get a personal loan?
If your documents are ready and credit score is good, approval can happen within 24–48 hours.

Q5. Does personal loan affect my credit score?
Yes. Timely EMI payments improve your score, while missed payments reduce it.

Save Home Loan Interest Amount!

Use Home Loan Excel Calculator that will help you to Save Interest Amount on Home Loan EMI.
Click below button to download Home Loan EMI and Prepayment Calculator in Excel:

Watch how Home Loan Calculator in Excel Works

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