Simple Interest Calculator

Simple interest is charged only on the original principal — it never compounds. Personal loans between family members, some crop loans and many short-term advances use it. The formula is one line, but doing it right every time is what this calculator is for.

The formula

SI = P × R × T ÷ 100

FAQ

When is simple interest used in India?

Short-term personal loans, some agri and gold loans, and internal company advances commonly use simple interest; mortgages and deposits almost always compound.

Why does a bank quote flat interest on loans?

Flat-rate loans (common for vehicle finance) charge interest on the original principal even as you repay — the effective rate is roughly double the quoted flat rate.

Simple vs compound: which is cheaper to borrow at?

For the same nominal rate, simple interest costs less over the life of a loan because interest never accrues on unpaid interest.

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