How is Interest CalculatedWhen you borrow any loan, whether a car loan, home loan or personal loan, you are liable to pay both the principal loan amount plus the interest charged. Interest is a cost or a fee paid for borrowing a specific amount of money for a fixed tenure. Calculating interest is not a tedious task anymore, all thanks to the digital platforms available for loan applications. Loan provider websites and apps have eliminated manual calculations and increased accuracy.
Short term loans mean higher EMIs, but less rate of interest in the long run, while long term loans incur lower monthly EMIs, but cost you more interest till the entire loan tenure. Use the interest rate calculator to calculate the interest easily in no time or go the manual way using the below simple interest formula:
Principal Loan Amount X Interest Rate X Total Number of Years = Interest
INR 2,00,000 x 5% x 5 = 50,000 is the interest for 5years
Factor Affecting the Interest Rate
Getting clarity on the interest amount helps in deciding the monthly EMI. Clear all your outstanding loans on timeto get a good interest rate. With reasonable interest rates and flexible timelines, you can manage EMIseasily. The interest rate offered by the lender depends on three factors:
- Principal loan amount
- Monthly income
- Credit history
Calculate Loan EMIs with Simply Cash
Simply Cash, a secured personal loan app in India, is easy to use and recommended to calculate loan EMIs. The tool is free, secured, and accurate for giving results within seconds.The interest rate charged may be fixed or floating, depending upon the loan type you have applied.Floating interest rates may increase or decrease with time. Check the base interest rate available and calculate the EMI. Download the Simply Cash app via Google Play store and begin with calculating the interest and derive EMIs that fit your budget.A loan calculator is a technology that saves your time in doing manual calculations. Assessing EMI simplifies loan taking decisions and helps in quick disbursal.