Calculate Personal Loan EMI
Your EMI Breakdown
Monthly EMI
₹9,964
Pay this amount every month for 3 years
Principal Amount
₹3,00,000
Loan amount borrowed
Total Interest
₹58,715
Interest paid over 3 years at 12% p.a.
Total Amount Payable
₹3,58,715
Principal + Interest over loan tenure
Note: EMI calculations are based on reducing balance method. Actual EMI may vary based on bank processing fees and other charges.
What is a Personal Loan?
A personal loan is an unsecured loan that you can borrow from banks, NBFCs, or online lenders for any personal use without providing collateral. Unlike home or car loans that are tied to specific assets, personal loans offer complete flexibility in how you use the funds.
Personal loans are ideal for medical emergencies, weddings, education expenses, home renovation, travel, debt consolidation, or any urgent financial need. They typically come with fixed interest rates, fixed tenure (1-7 years), and require minimal documentation with quick disbursal often within 24-48 hours.
Since these are unsecured loans, interest rates are higher (8-24% p.a.) compared to secured loans, and approval depends mainly on your credit score, income stability, and repayment capacity.
Common Uses of Personal Loans
💍 Weddings & Events
Cover wedding expenses, engagement ceremonies, destination weddings, or other major life events with flexible repayment options.
🏥 Medical Emergencies
Get instant funds for hospitalization, surgeries, treatments, or medical procedures not covered by insurance.
🎓 Education Expenses
Finance higher education, professional courses, certifications, or skill development programs for yourself or family.
🏠 Home Renovation
Upgrade or renovate your home, buy furniture, electronics, or carry out repairs without touching your savings.
✈️ Travel & Vacation
Fund your dream vacation, honeymoon, international trip, or family holiday with easy EMI options.
💳 Debt Consolidation
Combine multiple high-interest debts (credit cards, other loans) into one personal loan with lower interest rate.
Personal Loan Eligibility & Requirements
✓ Eligibility Criteria
- • Age: 21 to 60 years (varies by lender)
- • Minimum income: ₹15,000 - ₹25,000 per month
- • Employment: Salaried or self-employed for 2+ years
- • Credit Score: 750+ for best rates, 650+ minimum
- • Residence: Indian citizen or NRI
✓ Documents Required
- • Identity Proof: Aadhaar, PAN, Passport, Voter ID
- • Address Proof: Utility bills, Rental agreement
- • Income Proof: Salary slips (3 months), Bank statements (6 months)
- • For Self-Employed: ITR, Business proof, Financial statements
- • Passport size photographs
Smart Tips for Personal Loans
Check Your Credit Score First
A credit score of 750+ gets you the best interest rates. Improve your score before applying by paying existing debts on time.
Compare Interest Rates
Different banks offer different rates. Even a 0.5% difference can save thousands over the loan tenure. Compare before finalizing.
Borrow Only What You Need
Don't overborrow just because you're eligible for a higher amount. Borrow only what's necessary to avoid unnecessary interest burden.
Choose Shorter Tenure If Possible
Shorter tenure means higher EMI but significantly lower total interest. Pay off quickly if you can afford higher EMI.
Read Fine Print Carefully
Check for processing fees (1-3%), prepayment charges, late payment penalties, and other hidden costs before signing.
Consider Prepayment Options
Choose loans with zero or minimal prepayment charges. Prepaying reduces interest burden significantly.
Frequently Asked Questions
1. What is the maximum personal loan amount I can get?
Personal loan amounts typically range from ₹10,000 to ₹40 lakhs depending on your income, credit score, and lender policies. Most banks offer up to 10-20 times your monthly salary. For example, if you earn ₹50,000/month, you may be eligible for ₹5-10 lakhs. Higher amounts require excellent credit scores (750+) and strong income proof.
2. What credit score is needed for a personal loan?
While the minimum credit score is typically 650-700, a score of 750 or above is recommended for best interest rates and quick approval. Scores between 700-750 get moderate rates, while below 650 may face rejection or very high interest rates (18-24%). Check your CIBIL score before applying and improve it if needed by clearing existing debts.
3. How long does personal loan approval take?
Modern digital lenders offer instant approval and disbursal within 24-48 hours if you have all documents ready and a good credit score. Traditional banks may take 3-7 days. Pre-approved loans for existing customers can be disbursed in hours. Delays happen due to incomplete documentation, low credit scores, or verification issues.
4. Can I prepay my personal loan without penalty?
As per RBI guidelines, there's no prepayment penalty on floating rate personal loans. However, fixed-rate loans may have prepayment charges (2-5% of outstanding amount). Some lenders waive charges after a lock-in period (12 months). Always check your loan agreement for prepayment terms before taking the loan.
5. What happens if I miss an EMI payment?
Missing an EMI attracts late payment charges (₹500-1000 or 2% of EMI), affects your credit score negatively, and may lead to penalty interest. Continuous defaults (90+ days) make the loan NPA (Non-Performing Asset), severely damaging credit score and making future loans difficult. If facing issues, contact your lender immediately to discuss restructuring options.
6. Is personal loan interest tax deductible?
Generally, personal loan interest is NOT tax deductible. However, if you use the loan for business purposes, you can claim interest as business expense. If used for buying/renovating a house, you may claim deduction under Section 24(b) up to ₹2 lakhs. Always maintain proper documentation and consult a tax advisor.
7. Can I get a personal loan with a low salary?
Yes, many lenders offer personal loans with minimum salary requirement of ₹15,000-25,000 per month. However, lower salaries typically mean lower loan amounts (₹50,000-2 lakhs) and higher interest rates. Having a good credit score, stable employment (2+ years), and additional income sources can help. Some NBFCs are more flexible than banks for low-income applicants.
8. What are the processing fees for personal loans?
Processing fees typically range from 1% to 3% of the loan amount plus GST. For a ₹3 lakh loan, you may pay ₹3,000-9,000 as processing fee. Some lenders waive fees during special offers or for existing customers. This fee is non-refundable even if your loan gets rejected. Always factor in processing fees when calculating total loan cost.
9. Can self-employed individuals get personal loans?
Yes, self-employed professionals and business owners can get personal loans but requirements are stricter. You need ITR for last 2-3 years, business vintage of 3+ years, bank statements showing regular income, and good credit score. Interest rates may be slightly higher (0.5-1% more) than salaried individuals. Ensure your ITR shows sufficient income to support the EMI.
10. Should I take a personal loan or use my credit card?
Personal loans are better for large amounts (₹1 lakh+) with interest rates of 10-16%, while credit cards charge 36-42% p.a. For emergencies under ₹50,000 that you can repay in 1-2 months, credit cards work. For longer tenures or bigger amounts, personal loans save significant interest. Credit cards offer flexibility and rewards, while loans have fixed EMI and tenure. Choose based on amount, repayment timeline, and total cost.