1. What is Simple Interest?

Simple interest is a method of calculating interest where the interest is computed only on the original principal amount throughout the loan tenure. It's calculated using the formula: Interest = Principal × Rate × Time.

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: For SBI home loans, the current starting interest rate is 7.50% per annum. The calculator converts the percentage rate to decimal form automatically.

3. About SBI Home Loans

Details: State Bank of India offers home loans with interest rates starting from 7.50% p.a. The actual rate may vary based on credit profile, loan amount, and tenure. This calculator provides an estimate of simple interest for planning purposes.

4. Using the Calculator

Tips: Enter principal amount in INR, annual interest rate in percentage (without % sign), and time period in years. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Is simple interest used for SBI home loans?
A: Most home loans use compound interest, but this calculator provides simple interest as a basic estimate. For exact calculations, use an EMI calculator.

Q2: What is the current SBI home loan interest rate?
A: Rates start at 7.50% p.a. but vary based on loan amount, tenure, and applicant's profile.

Q3: How often is interest compounded in SBI home loans?
A: Typically monthly for home loans, which makes the effective interest higher than the simple interest calculation.

Q4: Can I prepay my SBI home loan?
A: Yes, SBI allows prepayment with certain conditions. Prepayment reduces total interest payable.

Q5: What factors affect home loan interest rates?
A: RBI repo rate, MCLR, credit score, loan-to-value ratio, and applicant's income profile.