Personal Loan Calculator

Take a personal loan for urgent financial needs like medical emergencies, wedding expenses, home renovation, debt consolidation, or education fees. It's ideal when you need quick funds without collateral. Avoid taking personal loans for speculative investments or non-essential purchases due to higher interest rates.

To get the best rates: maintain a credit score above 750, have stable employment with good income, apply with your existing bank for relationship benefits, compare offers from multiple lenders, negotiate if you have a good credit history, avoid applying to multiple lenders simultaneously, and consider balance transfer if you have an existing loan at higher rates.

Required documents include: identity proof (Aadhaar/PAN card), address proof (utility bills/rent agreement), income proof (3-6 months salary slips for salaried, ITR for self-employed), bank statements (3-6 months), passport size photographs, and employment proof (offer letter, ID card). Some lenders may ask for additional documents based on your profile.

General eligibility: Age 21-60 years, minimum monthly income ₹15,000-25,000 (varies by lender and city), stable employment of 1+ years for salaried, 3+ years business vintage for self-employed, credit score above 650 (preferably 750+), and existing EMI obligations shouldn't exceed 50% of monthly income.

Personal loans generally don't offer tax benefits. However, if the loan is used for business purposes, the interest can be claimed as a business expense. If used for home renovation or construction, interest may be eligible for deduction under Section 24 of Income Tax Act (up to ₹30,000 for self-occupied property). Maintain proper documentation to claim such benefits.

Yes, most banks allow prepayment or foreclosure of personal loans. Prepayment charges range from 2-5% of the outstanding amount. Some lenders offer zero foreclosure charges after 6-12 months. Check your loan agreement for specific terms. Even partial prepayments can significantly reduce your interest burden and tenure.

Processing fees range from 1% to 3% of the loan amount, typically around 2%. For a ₹5 lakh loan, expect to pay ₹5,000-15,000 as processing fee. This fee is non-refundable and deducted from the sanctioned amount or charged separately. Some lenders waive processing fees during promotional periods.

Personal loans offer lower interest rates (10.5-24% vs 36-42% for credit cards), fixed tenure with discipline, higher loan amounts, and are better for large expenses or debt consolidation. Credit cards are better for short-term needs with interest-free period, smaller amounts, and flexibility. For amounts above ₹50,000 needed for more than 2 months, personal loans are more economical.

Loan amount depends on your income, existing obligations, and lender policies. Typically, EMI shouldn't exceed 40-50% of your monthly income. With ₹40,000 monthly salary and no existing loans, you may get ₹4-6 lakhs for 3-5 years. Use the formula: Maximum EMI = (Monthly Income - Existing EMIs) × 0.5. Higher credit score and income can fetch better amounts.

Defaulting leads to severe consequences: late payment charges (2-3% per month), penalty interest on overdue amount, credit score drops significantly (impacting future loans), recovery agent visits and calls, legal proceedings and court cases, potential wage garnishment, and difficulty getting loans/credit cards for 3-7 years. Contact lender immediately if facing repayment difficulties.

While challenging, it's possible to get personal loans with scores between 600-700, but expect higher interest rates (18-24%), lower loan amounts, shorter tenure, requirement of co-applicant or guarantor, and stricter eligibility criteria. NBFCs are generally more flexible than banks. However, improving credit score before applying is advisable to secure better terms.

Personal Loan: Unsecured, no collateral, higher interest (10.5-24%), longer tenure (up to 5 years), EMI-based repayment, larger loan amounts based on income. Gold Loan: Secured against gold, lower interest (7-12%), shorter tenure (up to 3 years), flexible repayment options, loan amount based on gold value (75-90% of gold value). Gold loans are cheaper but require collateral.