What this scenario actually costs
A ₹10 lakh personal loan at 12% over 5 years settles at ₹22,244 a month. Across 60 instalments you hand over ₹13,34,667 in total: ₹10,00,000 of principal and ₹3,34,667 of interest. Interest is 25% of everything paid, which is the figure worth sitting with before signing — not the monthly number, which is designed to sound manageable.
The split moves sharply over the term. In year one, 42% of each payment is interest and only ₹1,55,290 of the balance is retired. By the final year the interest share has fallen to 6%, and ₹2,50,363 comes off the principal. Halfway through, at the end of year 2, the outstanding balance is still ₹6,69,725 — around 67% of what you borrowed. That is the part people find surprising, and it is why prepaying early is worth far more than prepaying late.
Half a point, and five years
At 11.50% instead of 12%, the instalment falls to ₹21,993 — a difference of only ₹252 a month, which is easy to dismiss. Over the full term it is ₹15,110. Rate negotiation is the highest-value conversation in the whole process, and it is usually the one people spend the least time on.
Tenure works the other way. Taking the same amount over 0 years raises the instalment to ₹88,849, about ₹66,604 more each month, and cuts the total interest to ₹66,185 — a saving of ₹2,68,481. A longer tenure lowers the monthly figure and raises the price. Both of those are visible on the sliders above; drag the tenure and watch the interest row rather than the headline.
Year-by-year breakdown
Each row is a full year of payments at ₹22,244 a month, split into what reduces the balance and what does not.
| Year | Principal paid | Interest paid | Balance |
|---|---|---|---|
| 1 | ₹1,55,290 | ₹1,11,643 | ₹8,44,710 |
| 2 | ₹1,74,985 | ₹91,948 | ₹6,69,725 |
| 3 | ₹1,97,177 | ₹69,756 | ₹4,72,547 |
| 4 | ₹2,22,184 | ₹44,749 | ₹2,50,363 |
| 5 | ₹2,50,363 | ₹16,570 | ₹0 |
What this does not include
A processing fee of half a percent to one percent is charged up front and appears nowhere in these figures. Credit-life insurance, if it is financed into the loan, raises the principal and therefore every number on this page. Ask the lender for the annual percentage rate rather than the headline rate — that is the figure that includes them. And if the loan is floating-rate, treat the total as an estimate: the instalment will hold and the tenure will move.
Nothing you do on this page is submitted, stored or logged. Move the sliders as much as you like. For the general version of this calculation, use the EMI calculator, and to see what the same monthly amount would become if it were invested instead, the SIP calculator runs the same compounding maths in the other direction.
Questions
What is the EMI on a ₹10 lakh loan at 12% for 5 years?
₹22,244 a month. Over 60 instalments that comes to ₹13,34,667, of which ₹3,34,667 is interest.
How much interest do I pay in total?
₹3,34,667, which is 25% of everything you hand over. In the first year 42% of each payment is interest; by the final year that has fallen to 6%.
What happens if the rate is half a point lower?
At 11.50% the instalment falls to ₹21,993 and the total interest to ₹3,19,556 — a difference of ₹15,110 over the full term. That is the size of the argument worth having with a lender.
What if I take it over 0 years instead?
The instalment rises to ₹88,849, about ₹66,604 more a month, and the total interest drops to ₹66,185. You save ₹2,68,481 for that extra monthly commitment.
Is this figure exactly what I will pay?
It is exact for a fixed rate with equal monthly instalments. Most Indian personal loans are floating-rate, and lenders usually absorb a rate change by extending the tenure rather than raising the instalment — so the monthly figure holds and the total does not. Processing fees and insurance are also excluded.