Calculate the duration or repayment period of a loan
This calculator helps you calculate the duration of the loan for a given amount, EMI and applicable annual interest rate.
Note: An NaN error means that the result did not converge, usually due to unrealistic assumptions. Try changing the parameters. Furthermore, this calculator assumes the monthly interest rate to be annual interest rate / 12 and not 12√(1+interest rate) - 1
How to use this calculator
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Enter the principal amount, i.e. the value of the loan you have received
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Enter the value of the EMI that needs to be paid back to the lender every month
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Enter the annual interest rate in %. Use the interest rate converter to determine the annual interest rate (yearly) if you only know the monthly interest rate
What are the basic loan related terms I need to know?
Duration: The duration of a loan is the length of time for which a loan is held. The duration can be calculated mathematically for a given interest rate, amount and EMI.
EMI: An EMI, or equated monthly instalment, refers to a constant monthly payment made to a lender. This term is used when a loan is paid back in instalments over a period of time.
Principal amount: The EMI consists of two parts - the interest and principal amount. The principal amount is the amount of an EMI in a given period that goes towards repaying the principal of a loan in the period. Over time, the principal amount of the EMI increases, while the principal amount decreases.
Interest amount: The interest amount is the amount of an EMI in a given period that goes towards repaying the interest due on a loan in the period. Over time, the interest amount of the EMI decreases, while the principal amount increases.
Interest rate: Interest is the amount of extra money you have to pay back on top of the amount you borrowed. It's like a fee for borrowing money. The interest rate is usually expressed as a percentage of the original amount borrowed, and it determines how much you'll have to repay over time.
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What are the formulas I need to know?
The formula to compute the duration of a loan repayment is given above. By providing relevant inputs: principal amount (P), loan EMI, and interest rate (r), we can solve the equation to calculate the loan duration that applies to a loan. This formula can be used to compute the interest rate for home loans, mortgages, car loans, personal loans etc.
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What is the duration of a loan of ₹50,00,000 if the EMI is ₹45,000 and the annual interest rate is 8%?
If ₹50,00,000 is borrowed at 8% with an EMI of ₹45,000, then the borrower would need to pay back ₹40,000 every month for 204 months. The interest paid on this loan is ₹41,80,000.
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What is the duration of a loan of ₹30,00,000 if the EMI is ₹45,000 and the annual interest rate is 8%?
If ₹30,00,000 is borrowed at 8% with an EMI of ₹45,000, then the borrower would need to pay back ₹40,000 every month for 89 months. The interest paid on this loan is ₹10,05,000.
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What is the duration of a loan of ₹30,00,000 if the EMI is ₹32,000 and the annual interest rate is 8%?
If ₹30,00,000 is borrowed at 8% with an EMI of ₹32,000, then the borrower would need to pay back ₹40,000 every month for 148 months. The interest paid on this loan is ₹17,36,000.
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What is the effect of increasing the EMI for a given principal amount and interest rate?
By increasing the EMI on a loan keeping the principal an dinterest rate constant, the duration of the loan reduces significantly. As in the above examples, on a loan of ₹30,00,000, by increasing the EMI from ₹32,000 to ₹45,000, the loan duration decreased from 148 months to 89 months. This corresponds to a loan repayment almost 40% faster. Furthermore, the interest paid on the loan reduces significantly by ₹7,31,000 as the loan would be repaid faster.
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What does this loan duration calculator do?
Every type of loan, e.g. home loan, car loan, education loan, personal loan, medical loan etc, needs to be repaid. Usually, the repayment takes place in equated monthly instalments or EMIs over a given number of months or years. The loan duration is usually also mentioned in an advertisement or in the documents of a loan, but should it be missing, then this calculator helps calculate the interest rate applied on a loan for a given principal amount, interest rate, and EMI.
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Why is this loan interest rate calculator useful?
This loan duration calculator is useful as it can help a person calculate the loan payback duration based off three compulsory inputs: the loan principal, the EMIs, and the interest rate. This understanding can help in understanding the impact of different types of loans and possibly in making better loan decisions.
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How do I use this loan duration calculator?
Instructions to use this loan duration calculator are provided above.