loading
loading
loading
Finance
Estimate the monthly EMI on a personal loan from the loan amount, interest rate, and tenure — and see why unsecured loans cost more than secured ones.
A personal loan EMI follows the same amortization model as any EMI loan: a fixed monthly payment where the interest portion (charged on the outstanding balance) shrinks and the principal portion grows every month, bringing the balance to zero exactly at the end of the tenure. What sets a personal loan apart is that it's unsecured — there's no asset like a home or car pledged as collateral, so if the borrower stops paying, the lender has nothing specific to recover. Lenders price that extra risk into a materially higher interest rate than a secured loan of similar size. Personal loans also tend to run over much shorter tenures — often one to five years rather than decades — partly because lenders want their exposure to a higher-risk, uncollateralized loan resolved sooner. The model assumes a fixed rate for the full tenure, monthly compounding, and no fees or prepayments.
A personal loan is unsecured — there's no collateral like a home or vehicle backing it — so if repayment stops, the lender has no specific asset to recover. Lenders compensate for that added risk by charging a meaningfully higher interest rate than they would on a secured loan.
Because the loan carries more risk for the lender, personal loans are typically structured over 1–5 years rather than the 15–30 years common for home loans, limiting how long that higher-risk exposure runs and keeping the total interest burden from compounding for decades.
Usually not overall — a longer tenure lowers the monthly EMI but means paying the (already higher) personal-loan interest rate for more months, which typically raises the total interest paid. Compare tenures in this calculator to see the total-interest effect for your own loan.