1 lakh personal loan EMI: quick answer
A ₹1 lakh personal loan is usually taken for a medical bill, a phone or laptop, a wedding expense or to clear a credit-card balance. At 12% — a common rate for salaried borrowers with good credit — the EMI is ₹3,321 for 3 years and you pay ₹19,572 in interest. Personal-loan pricing varies widely: ICICI Bank, for example, lists rates between 10.25% and 16.5% a year. Your rate depends on credit score, employer category, income and existing loans.
EMI for a 1 lakh personal loan by tenure
| Tenure | EMI | Total interest | Total payable |
|---|---|---|---|
| 1 year (12 EMIs) | ₹8,885 | ₹6,619 | ₹1,06,619 |
| 2 years (24 EMIs) | ₹4,707 | ₹12,976 | ₹1,12,976 |
| 3 years (36 EMIs) | ₹3,321 | ₹19,572 | ₹1,19,572 |
| 4 years (48 EMIs) | ₹2,633 | ₹26,402 | ₹1,26,402 |
| 5 years (60 EMIs) | ₹2,224 | ₹33,467 | ₹1,33,467 |
Stretching from 3 to 5 years lowers the EMI by ₹1,097 but adds ₹13,895 of interest. Because unsecured loans are expensive, choose the shortest tenure whose EMI you can comfortably pay.
EMI at different personal-loan rates
| Rate | 2 years | 3 years | 5 years |
|---|---|---|---|
| 10.25% | ₹4,626 | ₹3,238 | ₹2,137 |
| 12% | ₹4,707 | ₹3,321 | ₹2,224 |
| 14% | ₹4,801 | ₹3,418 | ₹2,327 |
| 16.5% | ₹4,920 | ₹3,540 | ₹2,458 |
The real cost: processing fee and APR
Lenders usually charge a processing fee — ICICI Bank, for example, charges up to 2% of the loan plus GST — and it is normally deducted from the amount credited. On ₹1 lakh that is ₹2,360, so you receive ₹97,640 but repay EMIs on the full ₹1 lakh. The effective annual cost (APR) of the 3-year loan therefore rises from 12% to about 13.67%. Every lender must now give you a Key Fact Statement (KFS) showing the APR before you sign — compare loans on that number.
Flat rate vs reducing rate: don’t be fooled
Some lenders and fintech apps quote a flat rate, where interest is charged on the original amount for the whole tenure. The 12% reducing-balance loan above has the same EMI as a flat rate of only 6.52% — a flat rate looks much cheaper than it is. Always ask for the reducing-balance rate or the APR. Our guide on how EMI is calculated shows the formula.
Personal loan vs carrying a credit-card balance
Credit cards typically charge around 3–3.75% a month on revolving balances. At about 3.5% a month (~42% a year), paying the same ₹3,321 every month would never clear the balance, because the monthly interest alone (about ₹3,500) is more than the payment — compared with ₹19,572 on the personal loan. Using a personal loan to clear card debt saves money only if you stop revolving on the card.
Salary needed and eligibility
Most banks keep total EMIs within about 50–60% of net monthly income. The 3-year EMI of ₹3,321 alone needs a take-home of roughly ₹6,600 at 50% FOIR; banks also set a minimum salary for unsecured loans, which varies by lender and city. Existing EMIs reduce the amount you can borrow.
Prepayment and foreclosure
Paying ₹25,000 extra after 12 months would close the 3-year loan in 2 yrs 3 mo and save ₹5,466 of interest. Most personal loans are fixed-rate, and lenders often charge foreclosure fees (commonly 2–5% of the outstanding amount, sometimes after a lock-in). RBI’s rules effective 1 January 2026 ban prepayment charges only on floating-rate loans to individuals, so read the KFS for your loan’s terms.
1 lakh vs other personal-loan amounts
| Loan | 1 yr | 3 yrs | 5 yrs |
|---|---|---|---|
| ₹1 lakh | ₹8,885 | ₹3,321 | ₹2,224 |
| ₹2 lakh | ₹17,770 | ₹6,643 | ₹4,449 |
| ₹5 lakh | ₹44,424 | ₹16,607 | ₹11,122 |
| ₹10 lakh | ₹88,849 | ₹33,214 | ₹22,244 |
Tips
- For an amount this small, compare a personal loan with a no-cost EMI offer (if buying a product), an overdraft against an FD, or a loan against your PPF in years 3–6 of the account — all can be cheaper.
- Pre-approved offers in your bank app are often cheaper than open-market loans because the bank already sees your salary credits.
- Personal-loan interest is not tax-deductible unless the money is used for buying, building or repairing a house (deduction within the house-property limits) or for business.
- Avoid taking several small loans from apps; each hard enquiry and open account weighs on your credit score.