Loan Calculator
Calculate any loan payment – personal, car, student, business. With prepayment scenarios.
Monthly payment
What is a loan calculator?
A loan calculator helps you understand the true cost of borrowing money before you sign. It calculates your monthly EMI (Equated Monthly Installment), total interest you'll pay over the loan tenure, and total amount payable. Whether for a personal loan, car loan, business loan, or education loan, knowing these numbers in advance lets you compare offers between banks, budget appropriately, and plan prepayments. This calculator also includes a unique 'extra payment' scenario that shows how much interest you save and how many months you cut from the tenure by paying just a small extra amount each month - often a savings of thousands of rupees over the loan life.
How to use this tool
- Enter loan amount — The principal you want to borrow. Personal loans typically ₹50K-50L, car loans ₹3-15L, business loans ₹5L-2Cr.
- Enter interest rate — Annual percentage rate from the lender's offer. Personal: 11-24%, Car: 9-12%, Education: 8-14%, Business: 10-20% (varies by bank and credit score).
- Enter loan term — Tenure in years. Personal: 1-5 years. Car: 3-7 years. Education: 5-15 years. Business: 1-10 years.
- Optional: extra monthly payment — If you can pay more than the standard EMI, enter the extra amount. The calculator shows how much sooner the loan ends and how much interest you save.
- Read the breakdown — Monthly EMI, total interest, total paid, plus the extra-payment savings if you entered an extra amount.
EMI calculation
The standard EMI formula (reducing balance method):
EMI = P × r × (1+r)n / [(1+r)n - 1]
- P = principal loan amount
- r = monthly interest rate (annual rate / 12 / 100)
- n = tenure in months (years × 12)
Example: ₹5,00,000 personal loan at 12% for 5 years:
- r = 12/12/100 = 0.01; n = 60 months
- (1.01)60 = 1.8167
- EMI = 500000 × 0.01 × 1.8167 / (1.8167 - 1) = ₹11,122/month
- Total paid = 11,122 × 60 = ₹6,67,348
- Total interest = ₹1,67,348 (33% of loan!)
If you pay ₹1,000 extra each month, the loan finishes in 53 months instead of 60, and you save ₹19,000 in interest.
Examples
- ₹2 lakh personal loan @ 14% for 3 years: EMI ₹6,842/month, total interest ₹46K
- ₹5 lakh car loan @ 10% for 5 years: EMI ₹10,624/month, total interest ₹1.37 lakh
- ₹10 lakh education loan @ 11% for 8 years: EMI ₹15,978/month, total interest ₹5.34 lakh
- Same education loan + ₹2,000 extra/month: Cleared in ~6 years 8 months, saves ₹1.5 lakh interest
- ₹25 lakh business loan @ 13% for 7 years: EMI ₹45,453/month, total interest ₹13.18 lakh
Tips & best practices
- Keep total EMIs (across all loans) under 40-50% of your monthly take-home - lenders call this DTI ratio
- Even a small extra payment each month (just ₹500-1000) reduces interest dramatically over 3-5+ year loans
- Lower interest rate beats lower EMI - longer tenure feels easier monthly but costs much more total
- Check for prepayment penalties before signing - some lenders charge 2-4% on outstanding amount for early closure
- If your credit score is 750+, negotiate the rate down - banks have flexibility for high-score borrowers
- Compare APR (effective rate including fees) across lenders, not just the headline interest rate
- For tax benefits, education loans qualify for Section 80E deduction (entire interest paid is deductible) for 8 years
Limitations & notes
Calculator assumes fixed interest rate. Floating rate loans (most home loans, some business) have variable EMI as rates change. Processing fees (typically 0.5-3% of loan), GST on interest, insurance bundling, and other charges add another 1-3% to total cost. Always check the Annual Percentage Rate (APR) which includes all fees - not just the headline interest rate. Get a written quote with all charges itemized before committing.
Frequently Asked Questions
What's the difference between flat rate and reducing balance?
Reducing balance (used by 99% of formal lenders): interest is calculated on the outstanding principal which reduces with each EMI. Flat rate: interest is calculated on the original principal throughout the loan - this is 1.7-2x more expensive! If a lender quotes 'flat rate' interest, multiply it by ~1.85 to get the equivalent reducing balance rate.
Can I prepay my loan?
Yes, but check the prepayment penalty clause. Floating-rate retail loans usually allow free prepayment. Fixed-rate loans may charge 2-4% of outstanding balance as prepayment penalty. RBI rules prohibit penalty on individual floating-rate home loans for non-business borrowers.
How is loan EMI calculated?
Using the reducing balance EMI formula. Each month: interest portion = outstanding balance x monthly rate. Principal portion = EMI - interest. The principal portion reduces your outstanding for next month's calculation. Early EMIs are mostly interest, later EMIs are mostly principal.
Should I take a longer or shorter tenure?
Shorter is cheaper. A 5-year loan vs 10-year loan at the same rate pays roughly HALF the total interest. The downside is higher monthly EMI which strains cash flow. The right balance: choose the shortest tenure where the EMI is comfortable - 30-40% of take-home is sustainable.
What credit score do I need for a personal loan?
700+ for any reasonable rate, 750+ for best rates. Below 650, expect very high rates (18-24%) or rejection. Below 600, formal lenders won't lend - only payday-style NBFCs that charge 30-50%+. Check your score free at CIBIL.com before applying.
What is the difference between secured and unsecured loans?
Secured loans (home, car, gold) require collateral - the lender can seize the asset if you default. Rates are lower (8-12%) because the lender has security. Unsecured loans (personal, credit card) have no collateral - rates are higher (12-30%) because the lender takes more risk.
Can I get a loan as a self-employed person?
Yes, but banks ask for more documentation: 2-3 years ITRs, GST returns, bank statements, business proof. Approval rates are lower than for salaried, and rates may be 1-2% higher. NBFCs are more flexible with self-employed but charge even higher rates.