Interest Rate Calculator
Determine the true interest rate of any loan offer in seconds.
Loan Parameters
Enter amount details to find interest rate
Simple Interest Rate (p.a.)
15.00%
Annualized simple interest rate
₹15,000
15.00%
1.17%
Understanding the Rates
Simple Interest Rate: The basic annual rate calculated without compounding.
Effective Rate: The true annual rate when considering monthly compounding.
Monthly Rate: The interest charged per month.
When taking a loan or investing, the advertised interest rate doesn't always tell the full story. Hidden fees, compounding frequencies, and repayment structures can make the actual cost of borrowing (or return on investment) different from the nominal rate.
The 1 Finance Interest Rate Calculator works backwards: you input the amount you are borrowing (or investing) and the total amount you will repay (or receive). We then calculate the Simple Interest Rate, the Effective Annual Rate, and the Monthly Rate. This gives you a transparent, apples-to-apples comparison tool for evaluating financial products.
Understanding Interest Rates
Financial institutions often use different terms to describe interest rates. Here is a breakdown of what the calculator shows:
Simple Interest Rate
This is the most basic calculation. It assumes interest is paid only on the principal amount. It's useful for short-term loans or informal lending but can underestimate the cost of long-term debt.
Effective Annual Rate
Also known as EAR or APY, this rate accounts for the power of compounding. If a bank quotes a nominal rate but compounds monthly, the Effective Rate will be higher. This is the "true" economic cost.
Monthly Interest Rate
This breaks down the annual cost into a monthly figure. It is derived from the compound interest formula, showing exactly how much interest accumulates every 30 days.
Frequently asked questions
