What is a Monthly Interest Calculator?
This calculator estimates simple interest on a loan where the borrower pays interest every month and repays the principal separately. In many local transactions, the interest rate is described as an amount per ₹100 per month. For example, ₹2 per ₹100 per month means a monthly rate of 2%.
How to use the calculator
- Enter the principal, which is the amount of money borrowed.
- Enter the monthly interest rate. For ₹2 interest on every ₹100 each month, enter 2.
- Select Number of Months, or choose Loan Dates to calculate full months and remaining days between two dates.
- Optionally enter interest already paid. Check total interest, unpaid interest, and principal plus unpaid interest.
Monthly interest formula
Full-month interest = Monthly interest × Completed months
Extra-day interest = Monthly interest × Extra days ÷ 30
Total interest = Full-month interest + Extra-day interest
The extra-day formula assumes a 30-day month for interest proration, even when a calendar month has 28, 29, or 31 days. Completed months are counted from date to monthly anniversary, adjusting to the last day for shorter months.
Monthly interest example
For ₹1,00,000 borrowed at 2% per month, the interest is ₹2,000 per month. Over 2 full months, interest is ₹4,000. If another 15 days have passed, the additional interest is ₹2,000 × 15 ÷ 30 = ₹1,000. Total interest for the period is ₹5,000.
If you have already paid interest, enter it in the optional field to estimate the unpaid interest. The original principal remains outstanding until repaid.
Monthly interest vs annual interest
This tool accepts a monthly percentage, not an annual percentage. For example, 2% per month is a nominal 24% per year under simple interest (2 × 12), not 2% annually. The example is illustrative; loan agreements may specify different accrual or day-count rules.
Note: For exact settlements, confirm whether your agreement charges calendar-month interest, 30-day prorating, daily interest or compounding. This tool defaults to 30-day prorating for leftover days.
Frequently asked questions
Does the Number of Months option include extra days?
No. You enter only the number of full months. Extra-day interest is calculated only in Money Taken Date mode.
Can I choose both the loan start and end dates?
Yes. Select Loan Dates, enter the borrowing date and an end date (default today), and the calculator counts completed calendar months plus remaining days.
What if I have already paid interest every month?
Enter your interest payments in the Interest already paid field. Unpaid interest equals accrued interest minus interest paid (minimum zero). Principal payments are not separately modeled.
Is monthly interest compounded here?
No. The calculator uses simple interest on the original principal. It does not add unpaid interest to the principal or account for part-payments or a changing rate.