Personal Loan EMI Calculator

Personal loans often carry processing fees that raise the real cost. This calculator shows your EMI and the effective annual rate after fees.

Why the effective rate matters

If a bank charges a 2% processing fee plus 18% GST on a ₹5 lakh loan, about ₹11,800 is deducted up front. You receive less money but still repay EMIs on the full ₹5 lakh. The effective annual rate (similar to APR) is the rate at which the amount you actually receive equals the present value of all your EMIs. It is the fairest way to compare two loan offers.

EMI = P × r × (1 + r)^n ÷ ((1 + r)^n − 1) Amount credited = P − (fee% × P × 1.18) Effective rate: the monthly rate i where Amount credited = EMI × (1 − (1 + i)^−n) ÷ i, then × 12

Example

₹5,00,000 at 12% for 3 years gives an EMI of about ₹16,607 and total interest of about ₹97,858. With a 2% fee plus GST (₹11,800), you receive ₹4,88,200, and the effective annual rate rises to about 13.7%.

Ways to lower personal loan costs

Negotiate the processing fee. Many banks waive or cap it for existing customers.
A good credit score (750+) usually gets you a lower rate.
Choose the shortest tenure you can comfortably afford.
Check foreclosure and part-payment charges before signing.

Frequently asked questions

Is the processing fee refundable?

Usually not. It is deducted from the disbursed amount or charged separately, and GST at 18% is added. Include it when comparing offers.

What is the difference between the interest rate and the effective rate?

The interest rate is used to calculate your EMI. The effective rate also accounts for up-front fees, so it shows the true yearly cost of borrowing.

Why is interest so high in the early years?

Interest is charged on the outstanding balance. At the start the balance is highest, so most of each EMI goes to interest. As the balance falls, a larger share goes to principal. The year-wise table shows this shift.

Results are estimates for information only and are not financial, tax or investment advice. Rates and rules change, so confirm figures with your bank, employer or a qualified professional before making decisions.