1. What is Simple Interest?

Simple interest is a method of calculating interest charge on a loan where interest is calculated only on the principal amount, or the original amount borrowed.

2. How Does the Calculator Work?

The calculator uses the simple interest formula:

Where:

• \( P \) — Principal loan amount (INR)
• \( r \) — Annual interest rate (in decimal)
• \( t \) — Time period in years

Explanation: The formula calculates the total interest payable over the loan term without compounding.

3. Importance of Interest Calculation

Details: Understanding the interest amount helps borrowers assess the total cost of the loan and compare different loan options.

4. Using the Calculator

Tips: Enter principal amount in INR, annual interest rate in percentage, and time period in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Is this calculator specific to Axis Bank personal loans?
A: While it uses the standard simple interest formula, actual Axis Bank loans may have different terms or fees.

Q2: Does this include processing fees or other charges?
A: No, this calculates only the interest component. Actual loan costs may include additional fees.

Q3: What's the difference between simple and compound interest?
A: Simple interest is calculated only on principal, while compound interest is calculated on principal plus accumulated interest.

Q4: Are personal loans typically simple interest?
A: Most personal loans use compound interest, but this calculator provides a simplified estimate.

Q5: How can I reduce my interest payments?
A: You can reduce interest by borrowing less, choosing a lower rate, or paying off the loan faster.