Simple Loan Interest Calculator
Calculate the total interest payable on a simple interest loan. Useful for personal loans from friends, family, or short-term lending arrangements.
Simple Interest Formula
SI = (P × R × T) / 100
Where:
- P: Principal Amount
- R: Rate of Interest per year
- T: Time period in years
Example Scenarios
| Principal | Rate | Years | Interest | Total |
|---|---|---|---|---|
| ₹25,000 | 12% | 1 year | ₹3,000 | ₹28,000 |
| ₹1,00,000 | 10% | 3 years | ₹30,000 | ₹1,30,000 |
Frequently Asked Questions
Do banks use simple interest for loans?
Most bank loans (home, car, personal) use compound interest or reducing balance method, not simple interest. Simple interest is typically used for short-term non-bank lending.
What happens if I pay back parts of the loan early?
In a simple interest arrangement, paying back principal early reduces the interest calculation for the remaining period, saving you money.