Question 1

What is EMI?

Accepted Answer

EMI (Equated Monthly Installment) is a fixed monthly payment made to a lender to repay a loan within a specified tenure. It includes both the principal amount and the interest charged on the loan.

Question 2

How is personal loan EMI calculated?

Accepted Answer

Personal loan EMI is calculated using the formula: 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 / 100), and n is the tenure in months.

Question 3

What factors affect my personal loan EMI?

Accepted Answer

Three main factors affect your EMI: (1) Loan amount — higher loan means higher EMI, (2) Interest rate — depends on your CIBIL score, income, and lender, (3) Loan tenure — longer tenure reduces EMI but increases total interest paid.

Question 4

What is the minimum CIBIL score for a personal loan?

Accepted Answer

Most banks require a minimum CIBIL score of 700 for personal loan approval. However, some NBFCs may approve loans at 650+. A score above 750 helps you get the lowest interest rates.

Question 5

Should I choose a longer or shorter loan tenure?

Accepted Answer

A shorter tenure means higher EMI but lower total interest cost. A longer tenure reduces your monthly burden but increases the total interest paid. Choose a tenure where EMI doesn't exceed 40-50% of your monthly income.

Question 6

Can I prepay my personal loan?

Accepted Answer

Yes, most banks allow prepayment after 6-12 months. RBI mandates no prepayment penalty on floating rate loans. For fixed rate loans, banks may charge 2-5% foreclosure charges.

Question 7

Which bank offers the lowest personal loan interest rate?

Accepted Answer

As of 2026, Axis Bank and IndusInd Bank offer rates starting from 10.49%. SBI starts from 11.00%, HDFC Bank from 10.75%, and ICICI Bank from 10.85%. Actual rate depends on your CIBIL score and income.

Personal Loan EMI Calculator