Whenever you are taking out a loan, you have to pay both the amount i.e. the amount you have borrowed in your loan and interest on top of it. Repayments can be done in two parts such as
reducing the balance to pay off the loan and the interest covered in it.
First, you have to know about the basic facts about the loan before calculating the loan interestsuch as loan term, principal amount, repayment amount, repayment schedule, and interest rates.
After getting basic details about all the phases and documentary requirements of the loan, the next term is to calculate a set of the amount each month you have to pay as an interest at the
end of your loan term. For calculating the loan interest, you can apply the simple mathematical whizzes. Here's how:
(Interest rate/number of payments) * Loan principal = Interest
To pay the interest in the following months, you first need to calculate your new balance by using the following formulas:
Principal - (Repayment – Interest) = New Balance
Apparently, if you don’t have enough time to calculate the interest on your loan amount, then you can use the loan EMI calculator for calculating the interest on a monthly, fortnightly and