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Personal Loan: 6 Things to Check Before You Borrow

1 Oct 2026

Personal loans are quick to get, but they are expensive. A few checks can save a lot.

What ₹5 lakh at 12% costs

TenureEMITotal interest
2 years₹23,537₹64,882
3 years₹16,607₹97,858
5 years₹11,122₹1.67 lakh

Check your own loan in the Personal Loan EMI Calculator.

The checklist

  1. Total cost, not just the rate. Add processing fees and insurance.
  2. Prepayment and foreclosure charges. Ask what they are before you sign.
  3. Your EMI burden. Keep all EMIs within a safe share of income.
  4. Your credit score. A better score can lower your rate.
  5. Alternatives. A loan against FD, gold or a top-up on a home loan may be cheaper.
  6. The purpose. Use it for real needs. Avoid borrowing to invest or to fund a lifestyle.

Warning signs

  • Offers that say "no documents" and "instant" with unclear fees.
  • Pressure to take a larger amount than you need.
  • Missed EMIs can hurt your credit score and add penalties.
Try the Personal Loan EMI Calculator