A score above 750 can get you rates as low as 10.5%.
Watch out for fees
Banks charge 1-2% processing fee upfront.
Prepayment Trap
Some banks charge 3-5% for closing loans early! ✓
How it works
3 steps to plan your personal loan
No collateral, no asset valuation — just your numbers and a clear monthly commitment.
1
Enter loan amount & purpose
Set the amount you need — whether it's ₹50,000 for a medical emergency or ₹10L for a wedding. Use the common presets for instant benchmarks.
2
Adjust rate & tenure
Enter the rate your bank quoted (varies by CIBIL score). Adjust tenure from 1–7 years and watch total interest change in real time.
3
Compare & decide smartly
See your monthly EMI, total interest outgo, and amortization schedule. Find the tenure where EMI stays below 30–40% of your monthly income.
Understanding personal loans
How personal loans compare to other credit
Personal loans fill the gap where secured loans don't apply — but the higher rate comes with real tradeoffs worth knowing.
Factor
Personal Loan
Home / Car Loan
Collateral
None required
Asset pledged
Interest rate
10.5%–30%
8%–12%
Max tenure
Up to 7 years
Up to 30 years
Approval speed
1–3 days
1–3 weeks
Tax benefit
None (usually)
80C + 24(b)
vs Credit Card
10–30% rate
36–42% rate
Processing fee
1%–3% upfront
0.5%–1%
Common use cases
💍
Wedding expenses
Cover venue, catering, and other costs without liquidating savings or investments.
₹5L–₹15L · 3–5 yrs
🏥
Medical emergency
Quick disbursal (24–48 hrs) makes personal loans ideal for urgent hospital bills.
₹1L–₹10L · 1–3 yrs
📉
Debt consolidation
Replace 36% credit card debt with a 12% personal loan and save significantly.
₹2L–₹10L · 2–4 yrs
🏠
Home renovation
Faster and simpler than a top-up loan. May qualify for tax benefit under Sec 24(b).
₹3L–₹20L · 3–5 yrs
Why this calculator
Why use a Personal Loan Calculator?
Personal loans are the easiest to get — and the easiest to overborrow on. Knowing your exact cost before applying keeps you in control.
Avoid overborrowing
Banks often offer more than you need. Use the calculator to borrow exactly what you require — each extra lakh at 13% over 5 years costs ₹34,000+ in interest.
Spot the tenure trap
Reducing your tenure by just 1 year on a ₹5L loan at 13% saves around ₹18,000 in total interest. The calculator makes this tradeoff instantly visible.
Beat credit card interest
If you're paying 36–42% on credit card rollover debt, a 12–14% personal loan for debt consolidation is almost always the smarter financial move.
Compare bank offers fairly
Banks advertise "starting from 10.5%" but your actual rate depends on CIBIL and employer category. Plug in different rates to see the exact total cost difference.
What drives your rate
Factors that affect your EMI & interest rate
Unlike home loans, personal loan rates are almost entirely risk-based. The same bank can offer you 10.5% or 22% depending on these factors.
CIBIL Score vs Interest Rate you'll get
800–900
10.5%–12%
750–799
12%–15%
700–749
15%–20%
650–699
20%–26%
Below 650
26%–30%+
Pro tip: Check your CIBIL score for free on the CIBIL website before applying. Every hard inquiry by a bank temporarily reduces your score by 5–10 points — so apply only when you are confident of approval.
Employer category (Super A / A / B / C)
Banks classify employers into tiers. A Tier-1 MNC or PSU employee gets rates 2–4% lower than an employee of an unlisted SME — even with identical CIBIL scores.
FOIR — Fixed Obligation to Income Ratio
Banks calculate what percentage of your gross income goes toward existing EMIs. Most lenders cap this at 50–55%. If you're already at 40%, your personal loan eligibility shrinks significantly.
Income level & stability
Higher and more stable income means lower perceived risk. Salaried employees with 2+ years at the same employer get better rates than self-employed or job-hopping applicants.
Existing relationship with the bank
If you hold a salary account at the bank, you often get pre-approved offers with rates 0.5%–1.5% lower than walk-in applicants, plus reduced documentation and faster disbursement.
Smart money move
Use a personal loan to escape high-interest debt
If you're carrying a credit card rollover balance at 36–42% per year, a personal loan at 12–14% is one of the most effective ways to reduce your interest burden immediately.
₹62K+
Estimated interest saved by replacing ₹3L of credit card debt (36%) with a personal loan at 13% over 3 years. The EMI is similar — but you're building towards zero debt instead of revolving credit.
💳 Credit Card Rollover (₹3L)
36% p.a.
Total interest paid over 3 years ≈ ₹1,08,000+
💜 Personal Loan (₹3L)
13% p.a.
Total interest paid over 3 years ≈ ₹62,000 · Save ₹46,000+
How to do it
Take a personal loan → Pay off credit card balance in full → Cancel rollover → Repay loan at fixed EMI. Fixed EMI creates discipline; revolving credit does not.
Smart tips
Borrow smart, repay faster
Use soft inquiry tools to compare rates
Platforms like BankBazaar and PaisaBazaar let you check pre-qualified offers without a hard CIBIL inquiry. Compare at least 3 lenders before applying formally to protect your score.
Know the lock-in period
Most personal loans have a 6–12 month lock-in before you can prepay. After that, foreclosure penalties of 2–5% may apply on the outstanding principal. Factor this in before signing.
Account for the true cost of the loan
Add the processing fee (1–3% of loan amount, charged upfront), GST on fee, and any insurance premium bundled in. A 12% loan with 2% processing fee effectively costs more than a 13% loan with 0 fees.
Don't apply multiple places simultaneously
Each formal application triggers a hard inquiry that temporarily lowers your CIBIL score by 5–10 points. Multiple inquiries in 30 days can hurt your score enough to push you into a higher rate bracket.
Personal loan interest rate range
10.5–30%
The spread between the best and worst personal loan rates is enormous. A borrower with a 820 CIBIL at a top-tier employer can get 10.5%; a 680 CIBIL with an unknown employer may pay 26–30%.
Credit card debt cost vs personal loan
2–3x
Credit card rollover interest (36–42%) is roughly 2–3x higher than a personal loan. If you're carrying any balance month-to-month, debt consolidation should be your first financial move.
Recommended max FOIR
40–50%
Keep total EMI obligations below 40–50% of gross monthly income. If you're already at 35%, adding a large personal loan EMI may strain monthly cash flow significantly.
Before you sign
Common personal loan mistakes to avoid
Personal loans are easy to get but costly to mismanage. These are the three most common traps.
Choosing the longest tenure for lowest EMI
A ₹5L loan at 13% for 7 years has an EMI of ₹8,954 but you pay ₹2.5L in total interest. The same loan for 3 years costs ₹16,843 EMI but only ₹1.06L in interest — saving ₹1.44L. Shorter is almost always better for personal loans.
Ignoring processing fees and hidden charges
A 1.5% processing fee on a ₹10L loan is ₹15,000 deducted upfront — before you receive the money. Add GST at 18% on the fee, plus possible insurance premiums bundled in. Always ask for the full disbursal amount in writing before signing.
Taking a personal loan for discretionary spending
Vacations, gadgets, and luxury purchases financed at 14–20% create financial stress with no underlying asset value. If you must borrow for non-essential items, at minimum ensure the EMI is below 15% of your take-home and you have a clear repayment plan.
The golden rule: A personal loan makes sense when (1) the purpose is genuine and urgent, (2) the rate is lower than your alternatives (like credit card), and (3) the total EMI burden stays below 40% of your monthly income. If all three are true, proceed — but borrow only what you need.
Tax angle
Are there tax benefits on personal loans?
Generally no — but there are important exceptions depending on how you use the loan amount.
Section 24(b)
Home renovation or repair
If the personal loan is specifically used for renovation or repair of a residential property, you can claim interest paid as a deduction under Section 24(b) — up to ₹30,000 per year for a self-occupied property.
Maintain clear records: loan sanction letter, bank statements, and contractor invoices showing the loan was used for home renovation.
Business purpose
Business or professional use
If the loan amount is used to fund a business or professional activity (buying equipment, funding inventory, expanding operations), the entire interest paid can be claimed as a business expense — effectively reducing your taxable income.
The end use of funds must be demonstrable. Mixing business and personal use funds makes this difficult to claim and may attract scrutiny.
All other purposes
Personal, wedding, medical, travel
No tax deduction is available for interest paid on personal loans taken for weddings, vacations, medical expenses (unless Section 80DDB applies), education (Section 80E covers only education loans from financial institutions), or general consumption.
This makes the effective cost of a personal loan for personal use equal to the stated interest rate with no tax offset — a key reason to prefer lower rates and shorter tenures.
FAQ
Frequently asked questions
Everything you need to know before taking a personal loan in India.
Can I pre-pay or foreclose my personal loan early?
Yes, but most lenders impose a lock-in period of 6–12 months during which prepayment is not allowed. After that, a foreclosure penalty of 2–5% of the outstanding principal is common. Always clarify this before signing — some banks and NBFCs waive it after 12–24 months of repayment.
Does applying to multiple banks hurt my CIBIL score?
Yes. Every formal loan application triggers a "hard inquiry" on your credit report, which temporarily reduces your CIBIL score by 5–10 points. Multiple hard inquiries within 30–45 days signal credit desperation to lenders and can push you into a higher rate bracket or trigger rejection. Use soft inquiry / pre-qualification tools first to shortlist 1–2 lenders before applying formally.
How quickly can I get a personal loan disbursed?
For salary account holders with pre-approved offers, disbursement can happen within hours. For fresh applicants with all documents in order, most banks take 1–3 working days. NBFCs and fintech lenders (Bajaj Finserv, KreditBee, MoneyTap etc.) often disburse within 24 hours but at higher rates — sometimes 18–30%.
Is a personal loan better than using a credit card?
For amounts above ₹50,000 that you cannot repay in the next 1–2 billing cycles, a personal loan is almost always better. Credit card rollover interest (36–42% p.a.) is 2–3x higher than personal loan rates. A personal loan also forces discipline with fixed EMIs — unlike revolving credit card debt which can compound indefinitely if you only pay the minimum due each month.
What happens if I miss an EMI payment?
Missing an EMI triggers a late payment penalty (usually 2–4% of the EMI amount), and the default is reported to CIBIL within 30 days. A single missed EMI can drop your credit score by 50–100 points. If you're unable to pay, contact your lender before the due date — many offer a one-time restructuring or moratorium for genuine hardship cases.
Can a self-employed person get a personal loan?
Yes, but documentation requirements are stricter. Self-employed applicants typically need to provide 2 years of ITR, bank statements for 6–12 months, GST registration, and business vintage proof. Rates are generally 1–3% higher than for salaried applicants at the same CIBIL score due to perceived income instability.
Related tools
Explore more calculators
Use these alongside the Personal Loan Calculator for a complete financial picture.
Use the calculator above to find the right EMI, understand your total interest cost, and borrow only what you truly need — before you walk into the bank or sign anything online.