Reviewed November 2026 · Estimate only, not financial advice.
A personal loan is repaid in equal monthly instalments (EMI). Enter the amount, the annual rate and the term, and see the exact monthly payment — plus how much of it is interest.
How This Personal Loan Calculator Works
A personal loan is amortized: every monthly payment covers that month's interest first, and the rest reduces the principal. The monthly payment (EMI) is fixed for the whole term, so the interest share shrinks and the principal share grows as the balance falls.
EMI = P × r × (1 + r)n ÷ ((1 + r)n − 1)
P = loan amount, r = monthly rate (annual rate ÷ 12), n = number of monthly payments. Total interest = EMI × n − P.
Worked example: $20,000 borrowed at 8% annual interest for 5 years (60 payments). Monthly rate = 0.08 ÷ 12 = 0.006667. EMI = $405.53 per month, total paid = $24,331.67, so total interest = $4,331.67 — about 22% of the amount borrowed.
Practical tips
A lower rate beats a shorter term — usually.Dropping the rate by 1 percentage point saves more than shaving a year off the term on most loans. Compare offers by APR, not by the monthly payment alone.
Watch the origination fee.Some lenders charge 1–8% of the loan up front. A loan with a low rate and a big fee can cost more than a slightly higher rate with no fee — add the fee to the total paid before comparing.
Extra payments cut interest directly.Any extra payment goes straight to principal (confirm your lender applies it that way). Even $25 extra a month shortens the term and the total interest.
Never borrow for the monthly payment alone.A longer term lowers the EMI but raises total interest. Pick the shortest term whose payment fits your budget comfortably.
Frequently Asked Questions
What is EMI?
EMI stands for Equated Monthly Installment — the fixed amount you pay every month until the loan is repaid. It covers that month's interest plus a slice of the principal.
How is the EMI calculated?
EMI = P × r × (1 + r)^n ÷ ((1 + r)^n − 1), where P is the loan amount, r is the monthly interest rate (annual rate ÷ 12), and n is the number of monthly payments.
Does a longer term mean I pay more interest?
Yes. The monthly payment falls, but you pay interest for more months. On a $20,000 loan at 8%, stretching from 5 to 7 years adds roughly $1,900 of interest.
What is a good personal loan rate?
Rates depend on your credit score, income and the lender. In the US, strong-credit borrowers often see 7–12% APR, while lower scores can mean 20% or more. Always compare the APR, which includes fees.
Can I pay off a personal loan early?
Most US personal loans have no prepayment penalty, but check your agreement. Paying early saves the remaining interest — put any windfall toward the highest-rate debt first.
Is this financial advice?
No. This is a planning estimate only, not financial advice.
