Personal Loan Calculator





Personal Loan Calculator

Personal loan is a type of unsecured loan taken by individuals from banks and other financial institutions for their own use. The money borrowed can be used to fund a holiday, finance children’s education, spend on a wedding, pay for medical treatment, cover cost of home renovation, etc. Personal loan is also referred to as an ‘All-purpose loan’, given that there is no restriction on how the funds are utilized.

Such a loan is generally granted on the basis of the borrower's integrity and capability to pay. Like any other loan, the borrower must repay it as per the agreed terms with the lending institution. The repayment term can be anywhere from a few months to a few years, paid in the form of equated monthly instalments.

How Personal Loan Calculator works

The personal loan calculator is a useful tool that helps users calculate approximately how much they will have to pay as Equated Monthly Instalments. The EMI amount is derived on the basis of the personal loan amount, tenure and interest rate. Loan amount here refers to the sum of money that an individual intends to borrow from a bank. The interest rate is denoted as a percentage charged by the bank on the loan, and the loan tenure is the period chosen by the applicant for repaying the loan.

Formula for Calculating EMIs

The mathematical formula that can be applied to calculate EMIs on personal loan is:

EMI = [P x R x (1+R)^N]/[(1+R)^N-1]

  • Here, P stands for the principal loan amount,
  • R is the interest rate per month and
  • N is the number of monthly instalments.

Eligibility Criteria for Personal Loan

The eligibility criteria to avail a personal loan will vary from one lender to another. Listed below is the basic personal loan eligibility criteria for some of the banking institutions across the country:


ProfessionWorking in private limited companies or public sector undertakings (including state, central and local bodies)
Eligible Age21 years to 60 years
Required Work ExperienceAt least 2 years (1 year must be with present employer)
Minimum Monthly Income for EligibilityRs. 15,000 (Rs. 20,000 in Mumbai, Chennai, Hyderabad, Delhi, Bengaluru, Pune, Kolkata, Ahmedabad, Cochin

Source: HDFC Bank

Axis Bank

Individuals who can take a Personal Loan- Salaried employees
- Salaried doctors
- Employees of public and private limited companies
- Public and private limited companies
- Government sector employees including PSUs Central and Local bodies
Eligible age Contnent R2C2
Minimum net monthly incomeRs. 15,000

Source: Axis Bank

Kotak Mahindra Bank

Who can applyIndian resident who is an active employee of an MNC, Public or Private limited company
Age21- 58 years
Minimum net salaryRs. 20,000 per month
Minimum educational qualificationGraduate
Minimum work experience1 year

Source: Kotak Mahindra Bank

Benefits of Online Personal Loan Calculator

There are many benefits to using a personal loan EMI calculator. Here is a look at a few of them:

  • Saves time and effort from performing tedious calculation: Through the use of a personal loan calculator, individuals are able to find out the EMIs they will need to pay within a matter of seconds. They do not have to invest time toward manual calculations. All that one will need to do is enter the loan amount, interest rate and loan tenure, and the online calculator will show how much the individual will need to pay as EMIs.
  • Accurate result: In case of manual calculation, there is always room for error if an individual is not careful with the numbers. On the other hand, one can be assured of accurate results when using personal loan calculators.
  • Helps to plan finances: On entering key details of a loan, users are able to ascertain how much they would be required to pay as EMIs. Knowledge of this is important as it will help them identify whether they can afford the loan, and the impact it will have on their financial health.

Factors Affecting Interest Rates on Personal Loans

The following factors are taken into consideration by banks and other financial institutions while determining the lending rate:


Applicants in the high-income category are generally considered a safer bet. The more the earnings, the greater the possibility that an individual will be granted personal loan at lower interest rates. For lenders, the income of an individual is directly proportional to his or her repaying capacity. Those in the lower income bracket are likely to be sanctioned loan for high interest, since the element of risk is higher.

Reputation of Employer

Individuals employed with organizations of repute are often granted lower rates. Timely salaries and job stability are factors that are taken into account in the case of applicants working in well-established organizations. Some banks prescribe work experience of at least a year. However, they might relax this eligibility norm for employees working for the top-rated companies on account of the reputation of their employer.

Credit Profile - Credit Score and Report

Credit score is a three-digit number, representing an individual’s creditworthiness. It can range from 300 to 900, and the closer the figure is to 900, the better. Most financial institutions accept applications from users whose scores are 750 and above. A credit report is a summary of an individual’s credit history - reported to credit bureaus by lenders and creditors. The score is determined on the basis of the data listed in the report.

Individuals with high credit scores and healthy credit reports i.e. without any negative remarks, are more likely to be granted personal loans at low interest rates. Low scores, on the other hand, can result in high interest rates being charged or possibly, even rejection of personal loan application.

Interest Rates offered by Top Banks on Personal Loans

BankInterest Rate
ICICI Bank11.25% to 22.00% per annum
HDFC Salaried - 15.50% TO 21.50%
Axis Bank8.65% (1 Year MCLR)
Kotak Mahindra Bank10.99% to 30%
IndusInd Bank10.75% to 31.50%

FAQs on Personal Loan Calculator

What are the documents required while applying for a personal loan?

The list of documents required when applying for a personal loan will differ from one lending institution to another. Some of the documents that lenders generally insist on are:

  • Identity proof (copy of driving license, PAN Card, Aadhaar, passport, voter ID card etc.)
  • Address proof (copy of driving license, passport, voter ID card, Aadhaar, etc.)
  • Bank statement of earlier months
  • Recent salary slips

How long can a borrower take to repay a personal loan?

The repayment tenure will vary from one financial institution to another. Generally, lending institutions provide flexible repayment options ranging from 12 months to 60 months.

What are the charges associated with taking a personal loan?

An individual will have to incur processing fees and servicing interest on the loan. The processing fee (and applicable GST) on the loan shall be deducted from the loan amount disbursed. Also, if the borrower decides to prepay the loan, then a prepayment charge will be levied.

What are personal loans used for?

An individual can use a personal loan in any manner he or she wishes. It can be used to cover expenses related to wedding, education, vacation, medical emergency, etc. The manner in which the money is utilized is completely up to the borrower.

Why is it required to have a good credit score?

A high credit score can help fetch competitive interest rates on personal loans. Banks and other financial institutions generally accept applications from individuals with a credit score of at least 750. The closer the credit score is to 900, the better the chances that the lender will offer low interest rates. A low rating, on the other hand, reduces the chances of a loan application being accepted. If a lender does accept an application with a poor credit history, chances are that the interest charged will be on the higher end.

Is pre-payment permitted for personal loans?

Some lending institutions allow customers to pre-pay the loan amount, based on their respective terms and conditions. It is likely that one will be charged a pre-payment fee. Thus, if a user intends to pre-pay his or her personal loan during the loan tenure, it is important to first check and see if the lender allows this.

Is a collateral required to avail a personal loan?

No. A personal loan is an unsecured loan, which means one will not have to pledge any asset for the loan. This unique feature has made it increasingly popular among customers.

How long will it take for a personal loan to be sanctioned?

The time taken to extend a personal loan varies from lender to another. Some companies may approve it in as little as 24 hours, while some others may even take up to 7 business days.

Who is eligible for a personal loan?

An individual must have a regular stream of income in order to be eligible for a personal loan. Some of the other factors that are taken into consideration by banks and other financial institutions include - the monthly take home salary, company where the individual is employed, his or her credit score and work experience, among others.

Are there any additional charges payable for personal loan?

A processing fee is charged on personal loans. However, this will be on the basis of the defined pricing matrix followed by the lending institution.