How to use the Personal Loan Calculator
- 1 Enter the loan amount.
- 2 Enter the markup rate a year.
- 3 Choose the tenure.
- 4 Enter the processing fee.
Worked example
Rs 1,000,000 at 22% over 3 years with a 1% processing fee. The monthly installment is about Rs 38,190. Total markup is about Rs 374,856, so with the Rs 10,000 fee you repay about Rs 1,384,856. Choosing two years instead of three would raise the installment but cut the total markup noticeably.
Features
Monthly installment
Reducing balance method used by banks.
Total cost
Markup plus processing fee.
Any tenure
One to five years.
When to use it
Comparing banks
Compare offers from different banks.
Weddings
Plan repayments for a wedding loan.
Medical expenses
Budget for urgent costs.
Debt consolidation
Replace costly debt.
Frequently asked questions
What markup do banks charge on personal loans?
Personal loan rates are usually KIBOR plus a spread, often well above 20% a year. Ask banks for current offers.
What is the maximum tenure?
Usually up to 5 years.
How much can I borrow?
Banks look at your salary and existing debts, often lending several times monthly income.
Is there a processing fee?
Most banks charge a processing fee and federal excise duty on it.
Can I repay early?
Yes, usually with an early settlement charge.
Do I need a guarantor?
Some banks require guarantors, depending on salary and employer.
Is Islamic financing available?
Yes. Islamic banks offer similar products under different structures.
Does my credit history matter?
Yes. Banks check the State Bank's credit information bureau, and a clean history helps approval.
Is markup fixed or variable?
Most personal loans have variable markup linked to KIBOR, so installments can change.
How is a monthly installment calculated?
Banks use the reducing balance method, so each installment covers markup on the remaining balance and repays part of the loan.
Is federal excise duty charged on fees?
Yes. Federal excise duty is usually charged on bank fees and charges.
What if my salary changes?
Your installment usually stays the same, but a lower income can make repayments harder, so borrow within your means.
Do banks lend to self-employed people?
Some banks offer personal loans to business people and professionals with proof of income.
What happens if I miss a payment?
Late payment charges apply and your credit record is affected, which can make future loans harder.
What is KIBOR?
The Karachi Interbank Offered Rate, a benchmark that banks add a spread to when setting loan markup. When the State Bank changes the policy rate, KIBOR usually moves too.
How can I get a lower rate?
A stable salary with a well-known employer, a good credit record and an existing account with the bank can all help you get a better offer.
Results are estimates based on the official rates linked above. Confirm important figures with the issuing authority or a qualified adviser before you act on them.
Reviewed by ToolsUnlocked Team · Last updated