Loan Interest Calculator
Calculate simple and compound interest on any loan amount. Compare both methods side by side with a year-by-year breakdown.
How to Use
Enter the principal (loan) amount.
Enter the annual interest rate.
Enter the loan tenure in years or months.
Choose between simple or compound interest.
Click 'Calculate' to see the interest, total repayment, and year-by-year comparison.
Frequently Asked Questions
What is the difference between simple and compound interest?
Simple interest is calculated only on the principal amount. Compound interest is calculated on the principal plus any accumulated interest. Over time, compound interest grows much faster than simple interest.
What is compounding frequency?
Compounding frequency is how often interest is calculated and added to the balance. Monthly compounding (12 times/year) means interest is calculated every month. Higher frequency leads to slightly more interest.
Which type of interest do banks use?
Most banks and financial institutions use compound interest for loans and savings. Simple interest is more common in short-term personal loans and some government schemes.
What are the formulas used?
Simple Interest: SI = P × R × T / 100. Compound Interest: CI = P × (1 + R/(100×n))^(n×T) - P, where P = principal, R = annual rate, T = time in years, n = compounding frequency.