How to calculate interest on loan using Bajaj Finserv interest calculator?
The online monthly interest calculator ensures quick computation of interest and EMIs. Using a Bajaj Finance loan interest rate calculator is simple, with the interface being user-friendly. Here is how to use an interest rate calculator in three simple steps:
Step 1: Enter the loan amount you want to avail.
Step 2: Next, enter the rate of interest on your loan.
Step 3: Select the repayment period you wish to opt for and get accurate results instantly.
Methods of calculating interest
The two primary methods of calculating the interest are simple interest rates and compound interest rates.
Simple interest
Simple Interest is a straightforward calculation where interest is calculated solely on the principal amount.
Here’s the mathematical formula, on which a simple interest calculator works to compute the loan amount:
A = P (1+RT)
To calculate Interest Paid on a loan, the formula is
Interest = A – P.
Where,
A = Total Amount Paid
P = Principal Amount
R = Rate of Interest
T = Number of years
Compound interest
Compound interest, on the other hand, takes into account both the principal and any accumulated interest, resulting in interest being earned on the initial amount as well as on the previously earned interest.
Here’s the mathematical formula, on which a compound interest calculator works to compute the loan amount:
A = P (1 + r/n) ^ nt
To calculate Interest Paid on a loan, the formula is
Interest = A – P.
- A = Total Amount Paid
- P = Principal Amount
- R = Rate of Interest
- N = number of times interest is compounded per year
- T = Number of years
Advantages of using a loan interest rate calculator
Here are some benefits of utilising our interest calculator:
Accuracy:Provides precise calculations for interest and repayments.
Time efficiency:Swiftly generates results, saving time for borrowers.
Financial planning:Assists in planning budgets with accurate repayment estimates.
Comparison tool:Enables easy comparison of loan offers from different lenders.
Cost-effectiveness:Helps borrowers minimize overall borrowing costs.
Informed decisions:Empowers borrowers with information for decision-making.
FAQs
Divide your interest rate by the number of payments you'll make that year. If you have a 6 percent interest rate and you make monthly payments, you would divide 0.06 by 12 to get 0.005. Multiply that number by your remaining loan balance to find out how much you'll pay in interest that month.
How do you calculate interest on a loan account? ›
Formula for Interest Calculator
- Simple Interest. The simple interest rate formula is as follows: A = P (1+rt) where, A = Total repayment amount of the loan. ...
- Compound Interest. Here's the formula used for computing compound interest: A = P(1 + r/n)nt where, A = Total repayment amount of the loan. ...
- EMI Interest.
Illustration: How is EMI on Loan Calculated?
- Formula for EMI Calculation is -
- P x R x (1+R)^N / [(1+R)^N-1] where-
- P = Principal loan amount.
- N = Loan tenure in months.
- R = Monthly interest rate.
- R = Annual Rate of interest/12/100.
The interest rate levied on your ₹50,000 personal loan can be anywhere between 10.49% p.a. to 33% p.a. The interest rate applicable to you will depend on your principal amount, repayment tenure, your CIBIL score and your personal loan repayment capability.
What is 6% interest on a $30,000 loan? ›
For example, the interest on a $30,000, 36-month loan at 6% is $2,856.
How do you calculate exact interest on a loan? ›
In simple interest, the basic equation is: Interest = Principal x Rate. However, there is the element of time which also plays a significant part in interest problems. Thus, the basis of equation is modified to: Interest = Principal x Rate x Time. Time is to be expressed in number of years or as part of a year.
What is the simple interest formula for a loan? ›
Simple Interest is calculated using the following formula: SI = P × R × T, where P = Principal, R = Rate of Interest, and T = Time period.
How do you calculate real interest on a loan? ›
A “real interest rate” is an interest rate that has been adjusted for inflation. To calculate a real interest rate, you subtract the inflation rate from the nominal interest rate. In mathematical terms we would phrase it this way: The real interest rate equals the nominal interest rate minus the inflation rate.
What is the formula for interest in finance? ›
If you'd like to calculate a total value for principal and interest that will accrue over a particular period of time, use this slightly more involved simple interest formula: A = P(1 + rt). A = total accrued, P = the principal amount of money (e.g., to be invested), r = interest rate per period, t = number of periods.
What is the formula for simple interest? ›
The formula for simple interest is SI = P × R × T / 100, where SI = simple interest, P = principal amount, R = the interest rate per annum, and T = the time in years.
The formula is: M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1], where M is the monthly payment, P is the loan amount, i is the interest rate (divided by 12) and n is the number of monthly payments.
How to calculate interest on a loan? ›
To calculate simple interest on a loan, multiply the principal (P) by the interest rate (R) by the loan term in years (T), then divide the total by 100. To use this formula, make sure you're expressing your interest rate as a percentage, not a decimal (i.e., a rate of 4% would go into the formula as 4, not 0.04).
How much would a $50,000 loan cost per month? ›
Here's what a $50,000 loan would cost you each month
| 8.00% |
|---|
| Two-Year Repayment | $2,261.36/month, $4,272.75 in interest over time |
| Seven-Year Repayment | $779.31/month, $15,462.10 in interest over time |
| 10-Year Repayment | $606.64/month, $22,796.56 in interest over time |
Jan 20, 2024
Current Interest Rate on Personal Loans
| Bank | Interest Rate (p.a.) | Processing Fee |
|---|
| IDFC First Bank | 10.90% p.a. - 36% p.a. | Up to 3.5% |
| Tata Capital | 10.99% to 36% | Up to 5.5% |
| Home Credit Cash Loan | 19.2% p.a. onwards | Up to 5% |
| Ujjivan Small Finance Bank | 11.49% p.a. - 16.49% p.a. | At the discretion of the bank |
26 more rowsThe formula for calculating simple interest is: Interest = P * R * T. P = Principal amount (the beginning balance). R = Interest rate (usually per year, expressed as a decimal). T = Number of time periods (generally one-year time periods).
