Personal Loan EMI Calculator
Personal Loan EMI Calculator
Your personal loan EMI, plus what the processing fee really costs: the money you actually receive, the total cost of borrowing, and how much the fee adds over the quoted rate.
Personal loan EMI
A personal loan of $5,00,000 at 12% for 36 months, with a 2% processing fee
EMI and the cost of the fee
- P
- the sanctioned loan amount
- r
- the monthly rate: annual rate ÷ 12 ÷ 100
- n
- the tenure in months
- fee
- the processing fee; the extra you repay because of it is (EMI − EMI on the amount received) × n
Worked example
A personal loan of $5,00,000 at 12% for 36 months, with a 2% processing fee
r = 12 ÷ 12 ÷ 100 = 0.01; (1.01)36 = 1.4308
EMI = 5,00,000 × 0.01 × 1.4308 ÷ 0.4308 = $16,607
Fee = 2% × 5,00,000 = $10,000, so you receive $4,90,000
Interest = 16,607 × 36 − 5,00,000 = $97,858; with the fee, the cost of borrowing is $1,07,858
At 12%, the $4,90,000 you receive would need an EMI of $16,275. You pay $332 a month more — $11,957 over the loan
5,00,000 at 12% for 36 months, by processing fee
| Fee | You receive | Interest + fee | Extra repaid because of the fee |
|---|---|---|---|
| 0% | $5,00,000 | $97,858 | $0 |
| 1% | $4,95,000 | $1,02,858 | $5,979 |
| 2% | $4,90,000 | $1,07,858 | $11,957 |
| 3% | $4,85,000 | $1,12,858 | $17,936 |
Why the fee makes a personal loan dearer than its rate
A personal loan’s EMI is worked out on the full sanctioned amount, but the processing fee — and, in India, GST on that fee — is usually deducted before the money reaches your account. You therefore pay interest on money you never receive. The calculator shows it in money: the fee itself, the EMI the quoted rate would imply on what you actually received, and the extra you repay over the loan because of the gap.
The single rate that captures all of this is the Annual Percentage Rate (APR): the annual cost of credit including the interest rate and all other charges. It has no closed-form formula — it is the rate at which the EMIs, discounted month by month, equal the money you received, and it can only be found by trial and error — so this page does not guess at it. What is certain is that any fee pushes the APR above the quoted rate, and a bigger fee, or a shorter tenure over which to spread it, pushes it further. In India the Reserve Bank requires lenders to give every retail borrower a Key Facts Statement before the loan is signed, with the APR and a sheet showing how it was computed. Compare lenders on that APR, not on the headline rate.
Some personal loans are advertised at a flat rate, charged on the original amount for the whole term. A flat rate looks far lower than the equivalent reducing-balance rate and should not be entered here as if it were one; ask the lender for the reducing rate, or read the APR from the Key Facts Statement. Bundled insurance, stamp duty and prepayment or foreclosure charges also sit outside the EMI.
The chart splits each year’s payments into principal and interest, with the fee shown in the first year when it is paid. In the example, $52,078 of the first year’s $1,99,286 in EMIs is interest. For the EMI alone on any loan, the EMI calculator does the same sum; to see how much time extra payments would cut, use the loan payoff calculator. This is arithmetic on the figures you enter, not financial advice.
Frequently asked questions
How is a personal loan EMI calculated?
EMI = P × r × (1 + r)n ÷ [(1 + r)n − 1], with r the monthly rate and n the months. $5,00,000 at 12% for 36 months is $16,607 a month.
Is the processing fee included in the EMI?
No. The EMI is set on the sanctioned amount; the fee is normally deducted from the money paid out. That is why the true cost is higher than the quoted rate.
Why doesn’t the calculator show the APR?
The APR is the rate at which the EMIs discount back to the money you received. It has no exact formula and must be found by iteration, so the page shows the cost in money instead. Your lender’s Key Facts Statement must state the APR.
Does GST apply to the processing fee?
In India lenders add GST to processing fees. Enter the rate shown in your sanction letter or Key Facts Statement; the page adds it to the fee.
Is a lower EMI always the better loan?
No. A longer tenure lowers the EMI and raises the total interest, and a lender with a lower rate but a higher fee can cost more over a short loan. Compare total cost, or the APR.
Related calculators
References
- Reserve Bank of India. Key Facts Statement (KFS) for Loans & Advances. RBI/2024-25/18, DOR.STR.REC.13/13.03.00/2024-25, 15 April 2024. Defines the Annual Percentage Rate (APR) as the annual cost of credit including the interest rate and all other charges, and requires a KFS with an APR computation sheet for all retail and MSME term loans sanctioned on or after 1 October 2024. Credit card receivables are exempt.
- Brealey RA, Myers SC, Allen F. Principles of Corporate Finance. McGraw-Hill. The present value of an annuity, from which the level-payment loan formula and its inverse for the number of payments follow.
- Reserve Bank of India. Reset of Floating Interest Rate on Equated Monthly Instalments (EMI) based Personal Loans. RBI/2023-24/55, 18 August 2023.