Personal Loan

Personal Loan in India

EMI formula, eligibility rules, comparison framework, prepayment, and balance transfer — all in plain English. No jargon. No fine print.

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EMI Calculation

EMI formula · Reducing balance · Tenure

How EMI is calculated using the reducing-balance method — principal, interest rate, and tenure formula explained with a worked example.

Eligibility

Income · CIBIL · Employment · Obligations

Income, credit score, employment type, and existing obligations — how banks decide how much you can borrow.

Comparison

Rate · Fee · Penalty · Total cost

How to compare personal loan offers — interest rate, processing fee, prepayment penalty, and total cost of borrowing.

Prepayment & Balance Transfer

Prepayment · Balance transfer · Foreclosure

When and how to prepay a personal loan, how balance transfer works, and whether switching lenders actually saves money.

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EMI Calculator

Personal loan EMI — principal, interest rate, and tenure in seconds.

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Frequently asked questions

What is the typical interest rate for a personal loan in India?

Rates range from about 10% p.a. to 24% p.a. as of 2026. The exact rate depends on your credit score, income, employer, and whether you have an existing relationship with the lender. Public sector banks typically start lower than private lenders.

What is the maximum tenure for a personal loan?

Most Indian lenders offer personal loan tenures from 12 months to 72 months (6 years). Some extend to 84 months for lower interest rates. A longer tenure reduces the EMI but increases total interest paid.

Does prepayment reduce the total interest on a personal loan?

Yes — when you prepay part of the principal, future EMIs are recalculated and the interest portion reduces. Most lenders allow part-prepayment from the 6th EMI onwards without penalty on floating-rate loans.

What is a personal loan balance transfer?

A balance transfer moves your outstanding loan to another lender offering a lower interest rate. Processing fees typically run at 1–2% of the outstanding amount. It makes sense only when the new rate is at least 2 percentage points lower.

Sources: Reserve Bank of India (RBI) loan guidelines (rbi.org.in) · SIDBI personal loan parameters · Income Tax Act 2025 · Bank websites (HDFC, ICICI, SBI). Rates verified 2026-10-07. Last reviewed by FinWiz24 Research Desk.