Personal Loan Calculator

How to use Personal Loan Calculator

1. Choose your number format and currency symbol.
2. Enter the loan amount, the lender's stated rate and the tenure.
3. Add the processing fee percentage, any fixed fees and the tax percentage charged on fees.
4. Compare the stated rate with the effective annual rate shown at the top.

Stated rate versus real cost

Lenders advertise a rate, but a personal loan also carries a processing fee, sometimes documentation or stamp charges, and tax on those fees. Since they are normally taken out of the amount you receive, you pay EMIs on the full loan while holding less cash. To compare offers fairly, find the rate that makes the cash you receive equal to the present value of your EMIs. That rate is the internal rate of return (IRR).

No closed form exists, so the calculator solves net = EMI x (1 - (1 + i)^-n) / i for the monthly rate i by bisection, then reports i x 12 as the nominal annual figure and (1 + i)^12 - 1 as the compounded effective rate.

A verified worked example

Borrow 5,00,000 at an example 14% for 36 months, with a 2% processing fee, a fixed fee of 500 and 18% tax on fees. The EMI is 17,088.81 and the EMIs total 6,15,197.34, so interest is 1,15,197.34. Fees are (10,000 + 500) x 1.18 = 12,390, so you receive 4,87,610.

Solving for the rate that turns 4,87,610 received into 36 payments of 17,088.81 gives about 15.78% nominal per year, or 16.97% compounded. The fees raised the true cost by roughly 1.8 percentage points over the stated 14%.

• Compare offers on effective rate and total payable, not the stated rate alone.
• A shorter tenure raises EMI but cuts total interest.
• Ask whether insurance is bundled; it would add to the cost.
• Before accepting, ask for a written key fact statement or loan schedule that lists every charge, so you can enter each one into the fields above.
• If the effective rate is far above the stated rate, try a lender with lower or zero processing fees and compare again.

Limits and privacy

The maths assumes fees are deducted at disbursal, equal monthly EMIs and no missed payments. Late fees, prepayment charges and rate changes are not modelled. Estimates only, not financial advice. Example values in the fields are not current market rates; always use the figures in your lender's sanction letter.

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Why use this personal loan calculator tool

• Effective rate (IRR). Solved numerically from the cash you really receive and the EMIs you pay.
• Fees and tax as inputs. Percentage fee, fixed fee and a tax percentage on fees are all yours to set.
• Total payable. Principal, interest and fees combined into one number.
• Net disbursal. See exactly how much reaches your account after fees.

Frequently asked questions

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