About loan calculator
This calculator works for any general loan with equal monthly payments, such as a personal loan, education loan or consumer loan.
Formula
Payment = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1), where P is the loan amount, r the monthly rate and n the number of months. A ₹5,00,000 loan at 12% for 3 years gives about ₹16,607 a month.
Compare offers properly
- Look at the total payable, not just the EMI.
- Ask about processing fees, GST on fees and prepayment penalties.
- A lower advertised rate can come with higher fees.
A worked example
A ₹5 lakh loan at 12 percent over 36 months has an EMI of about ₹16,607. You repay about ₹5.98 lakh in total, so the interest is roughly ₹98,000. Choosing 24 months raises the EMI to about ₹23,537 but cuts the interest to about ₹65,000.
Questions to ask a lender
Is the rate fixed or floating? What are the processing fee and prepayment charges? Is insurance mandatory? What happens if you miss a payment?
