How is Interest Calculated on a Personal LoanInterest rate is an amount a financial institution charges for the use of loan amount lent, deposited or borrowed. It is listed as the current liability and generally expressed as a percentage of the principal amount.
Interest rate is an unavoidable feature that is attached with personal loans and also one major reason why people hesitate to take loans. If the interest rate is not affordable, the loan amount borrowed becomes heavy to repay with a higher interest attached. Hence, it is important to calculate the interest rate to derive an affordable EMI.
With increased online personal loan apps and official credit websites, calculating interest and EMIs have become easy. The loan apps contain in-built interest rate calculator for accurate results in seconds. Let’s calculate the interest rate on personal loan with a formula:
Principal loan amount x interest rate x tenure = Interest
For example, if your interest rate is 13% annually and the loan amount taken is Rs 50,000 for a tenure of 24 months, then your interest rate payable will be Rs 7,081and the EMIs to be paid will be Rs.2378/-
Total loan amount borrowed with calculated interest = Rs.57,081
Lenders make profit with the added interest as a fee for personal loans. Depending upon the loan type, whether home loan, education loan or business loan, interest rate is either charged on a fixed basis or keeps fluctuating based on the prevailing market rate. Hence, check the percentage of interest online before submitting a loan application.
The Simply Cash app is a borrower’s app completely. It gives easy navigation to locate the interest rate calculator so that the required personal loan processing can speed up to the next level.
SimplyCash Loan EMI Calculator
Simply Cash, an instant personal loan app launched by Hero FinCorp is one of the most trusted and renowned financial lenders offering attractive interest rate with low processing fee.
Simply Cash Loan EMI Calculator is designed to customize your loan tenure, interest rate and monthly EMIs to be paid as a whole. The personal loan interest can be calculated easily on the loan calculator to get a clear picture of your loan amount and convenience of paying off the loan without any default. Many people depend on manual calculations assuming loan calculators online are complicated to use. This is absolutely false as EMI calculator is the fastest way to equate the monthly instalment, without any errors.
The change in interest rate can be either positive, negative or nothing at all. EMIs will vary depending upon the fluctuating market rate. Hence, it is recommended to go for a fixed rate of interest rather than a floating one.
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