Loan Tenure Calculator
| Loan Amount | EMI | Interest Rate | Loan Tenure (Years) | APR | Total Interest Payable | Total Payment |
|---|
What Is Loan Tenure?
Loan tenure, also known as the loan duration, refers to the time period over which you repay a loan. Whether it’s a home loan, car loan, or personal loan, understanding the tenure is crucial. It directly impacts your monthly budget, total interest paid, and overall financial planning.
Key Terms Explained:
1. Loan APR (Annual Percentage Rate):
- The Loan APR represents the annualized cost of borrowing.
- It includes not only the interest rate but also any additional fees or charges.
- A lower APR is generally more favorable for borrowers.
2. Total Interest Payable:
- This is the cumulative interest amount you’ll pay over the entire loan tenure.
- Reducing the loan tenure can significantly lower the total interest paid.
3. Total Payment (Principal + Interest + Fees & Charges):
- The total payment encompasses the following:
- Principal Amount: The initial loan amount borrowed.
- Interest: The cost of borrowing.
- Fees & Charges: Additional costs associated with the loan.
How to Use the Loan Tenure Calculator:
- Enter Loan Amount:
- Input the amount you plan to borrow (e.g., for a home loan).
- Interest Rate (%):
- Specify the annual interest rate offered by the lender.
- Fees & Charges (if any):
- Include any processing fees, prepayment charges, etc.
- Choose EMI Scheme:
- Decide whether you want EMI in advance or arrears.
- Click Calculate:
- The calculator will display essential details, including EMI, Loan APR, total interest payable, and total payment.
Also check: Inflation Impact- Purchasing power calculator
Why Reduce Tenure?
- Shorter tenure:
- Pros: Reduces overall interest burden.
- Cons: Higher EMIs.
- Longer tenure:
- Pros: Lowers EMIs.
- Cons: Increases total interest paid.
- Use the calculator to strike the right balance based on your financial goals.
Example Scenario:
Suppose you’re taking a home loan of ₹10,00,000 at an interest rate of 11.19% for 20 years (240 months). Here’s a breakdown:
- Loan EMI: ₹21,617.95
- Loan APR: 11.19%
- Total Interest Payable: ₹2,97,077
- Total Payment (Principal + Interest + Fees & Charges): ₹13,07,077
Calculating Loan Tenure from EMI:
- If you know the EMI and interest rate, you can calculate the loan tenure using the following formula:
- Loan Tenure (in months) = Total Loan Amount / (EMI × 12)
- Adjust the formula based on your specific EMI frequency (monthly, quarterly, etc.).
Explore Different Scenarios:
- Use online tools like EMI Calculator for personalized calculations.
- Remember, informed decisions lead to better financial outcomes.
Feel free to reach out if you have any further questions!
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For informational purposes only:
The information presented on this website is for informational purposes only and should not be construed as financial, legal, or professional advice. While we strive to provide accurate and up-to-date information, we cannot guarantee its completeness or accuracy. Any opinions expressed herein are solely those of the author or individual contributor and do not necessarily reflect the views of any company, organization, or other entity.
Do your own research:
Readers are encouraged to conduct their due diligence and consult with a qualified professional before making any decisions based on the information presented on this website. Trading, investing, and other financial activities involve inherent risks, and you could lose all or a portion of your capital. Past performance is not indicative of future results.
Ajay Bohra is an entrepreneur and a financial expert who guides people in their personal finance, investments and real estate. Ajay is passionate about showing people how to make money work for them.He guides them in the right direction to invest in Stocks, Mutual Funds, Real Estate and other avenues.
