Before you get a loan, it is imperative to understand your repayment capabilities to ensure you don’t fall into any financial trouble in the future. To understand how much debt, you can afford to take, make use of a simple interest calculator to calculate the monthly payment you will have to make.
When you borrow money from the lender, you have to pay an extra sum of money to the lender. This extra sum of money that you have to pay to the lender is known as simple interest. This type of interest, unlike compound interest, is calculated only on the principal portion of the loan.
To calculate simple interest towards your personal loan, one can use the below formula.
Simple interest= I= [(P×R×T0)/100]
In the above formula, P= principal
R= Rate of interest
T= Time
For instance, let’s consider the principal amount as Rs. 70000
For 3 years i.e. the time
The interest rate of 4%
I= (70000×4×36)/100
Total amount= Rs. 78400, whereas the interest, you will have to pay is Rs. 8400.
