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How Personal Loan Interest Rate Calculator Are Calculated?

How Personal Loan Interest Rate Calculator Are Calculated?

A personal loan is a credit amount sanctioned based on an interest rate that is to be paid till the loan tenure ends. The interest rate on a personal loan is determined by three major factors inclusive of credit history, monthly income, and repayment capacity. Borrowers holding a good credit profile usually get the best interest rates. A loan amount becomes heavier to repay by adding a percentage of interest. Hence, it is advisable to get a clear idea about the interest payable so that the loan amount taken doesn’t seem like a burden at a later stage.

Calculating interest is not a tedious task anymore, all thanks to the instant loan apps available for loan applications digitally. The interest rate charged may be fixed or floating, depending upon the loan type you have applied. Use the interest rate calculator to easily calculate the interest 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 5 years

Interest rate calculator helps in the instant calculation of monthly instalments on your loan. This makes it easy to plan the repayment better.

Interest Rate Formula, There are different formulas applied to determine a rate of interest whether it is simple interest or compound interest:

Simple Interest Rate

P x R x T ÷ 100, where P = Principal, R = Rate of Interest, and T = Time Period of the Loan in years.

Compound Interest Rate

P (1 + r/n) ^ nt
P is the principal amount, r is the rate of interest per annum, n denotes the number of times in a year the interest gets compounded, and t denotes the number of years.

Why Should You Use Interest Rate Calculators?

The loan interest rate calculator is one useful tool easily available on a financial institution’s website and app. As interest levied affects the repayment amount, the borrowers should make use of the interest calculator to get plenty of benefits:

Accessibility

The Interest rate calculator is not a restricted tool and can be accessed anytime and anywhere. Loan applicants don’t have to wrack their brains doing complex calculations manually.

100% Accurate Results

Error-free calculations are done in minutes. Depending upon the correct percentage of interest, accurate EMI results are derived at just one click

Saves Your Time

Saves your time from using complex formulas and lengthy calculations which may always not give accurate results.

Supports Financial Planning

Once you are clear about the interest rate, the EMI can be calculated further which helps in monthly financial management.

Simplifies Decision Making

The EMI amount is derived considering the calculated interest rate that helps in faster decision-making for loan application and disbursal.
EMIs will vary depending upon the fluctuating market rate. Hence, choose a fixed or floating interest rate after careful examination of the market scenario.
 

SimplyCash

SimplyCash powered by Hero FinCorp is an instant personal loan app providing cash loans of upto INR 1,50,000 for both salaried and self-employed individuals. Driven by technology and fuelled by innovation, SimplyCash solves instant cash requirements of customers in just a few simple clicks without any physical documentation or meeting. The mobile app is available to users through all popular Android play stores like Google play store, Samsung store, Xiaomi store etc. With one of the most widespread presence, SimplyCash currently offers its services in over 90 major locations in India. Known for a seamless process, instant loan disbursal and transparent pricing - SimplyCash truly lives upto the expectations of being a 'Hero' product.  

Note: SimplyCash is a duly registered trademark and is a loan product offered, managed and operated by Hero FinCorp. Hero FinCorp Limited is a Non-Banking Financial Company registered under the provisions of Reserve Bank of India ("RBI") and is in the business of finance and lending.

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ICICI BANK LTD HDFC BANK LTD IDBI BANK STATE BANK OF INDIA PUNJAB NATIONAL BANK YES BANK INDUSIND BANK KOTAK MAHINDRA BANK LTD

IDFC FIRST BANK LTD AXIS BANK BANK OF BARODA TAMILNAD MERCANTILE BANK LTD INDIAN OVERSEAS BANK INDIAN BANK RBL BANK LTD DEUTSCHE BANK AG CITY UNION BANK LTD FEDERAL BANK SOUTH INDIAN BANK STANDARD CHARTERED BANK CANARA BANK KARNATAKA BANK LTD CITI BANK BANDHAN BANK UNION BANK OF INDIA DCB BANK LTD DBS BANK INDIA LTD THE HONGKONG AND SHANGHAI BANKING CORPORATION LTD DEUTSCHE BANK UCO BANK

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