What is a personal loan EMI?
A personal loan EMI is the monthly repayment for an unsecured retail loan from an Indian bank or NBFC, computed using the RBI reducing-balance method. Personal loans require no collateral; pricing is therefore primarily driven by your credit score and FOIR.
The all-in cost is materially higher than a home or car loan because the lender carries unsecured-credit risk. But the speed-to-disburse (often 24–48 hours, sometimes instant for pre-approved offers) makes them the default for short-notice cash needs that don’t justify a credit-card EMI conversion.
How is personal loan EMI calculated?
Same RBI reducing-balance formula:
EMI = P × R × (1+R)ⁿ / ((1+R)ⁿ − 1)
Worked example — ₹5 lakh personal loan at 14% over 3 years:
- R = 14 ÷ 12 ÷ 100 = 0.01167
- (1+R)³⁶ = 1.5181
- EMI = 500,000 × 0.01167 × 1.5181 ÷ (1.5181 − 1) = ₹17,089 / month
- Total payment = 17,089 × 36 = ₹6,15,213
- Total interest = ₹1,15,213
Indian personal loan rate landscape (2026)
| Lender | Indicative rate band | Typical tenure | Processing fee |
|---|---|---|---|
| SBI | 10.65%–13.85% | 6–72 months | 1.5% |
| HDFC Bank | 10.50%–22% | 12–60 months | 2.5%–3.5% |
| ICICI Bank | 10.65%–16% | 12–72 months | 2.5% |
| Axis Bank | 10.49%–22% | 12–60 months | 2% |
| Bank of Baroda | 10.00%–16.50% | 12–60 months | 2% |
| Bajaj Finserv (NBFC) | 11%–35% | 6–96 months | 3% |
| Tata Capital (NBFC) | 10.99%–35% | 12–72 months | 2.5% |
| Money View / KreditBee (NBFC) | 16%–28% | 3–24 months | 3%–6% |
(Indicative; check our bank-specific variant pages for current rates and our bank-rates dataset for the canonical figures.)
Where personal loans make sense
- Short-notice cash needs when you cannot wait 1–3 weeks for a secured-loan disbursal
- Debt consolidation — converting high-rate credit-card revolving balances into a defined-tenure personal loan (typically saves 4–8 percentage points)
- Wedding / medical expenses that exceed your liquid savings but where you have predictable income
- Bridge financing when your home loan is delayed but down-payment is due
Where they don’t:
- Vehicle purchase — secured car/two-wheeler loans are 3–5 percentage points cheaper
- Business — secured business loans, working-capital lines, or even loans against property cost less
- Property — home loans at 8.5%–10% beat any personal-loan rate
Avoiding the cost traps
- Headline rate ≠ all-in cost. Always compute total interest + processing fee + GST + insurance (if pushed). Compare the amount you repay over the tenure across lenders.
- Floating vs fixed. Most personal loans are fixed; a few NBFCs offer floating. Avoid floating unless you understand the reset cadence.
- Top-up vs new. A top-up loan against an existing relationship is often cheaper than a fresh personal loan from a new lender.
- Prepayment economics. If your bank charges 4% prepayment + a fresh processing fee on a balance transfer, you need a 2 percentage-point rate drop to break even. Run the numbers on our balance transfer calculator.