In the interest rate calculator you can check what will be the rate that you will have to cover month by month on your financial loan. It is a simple and effective online financial tool that will help you manage your finances and respond to your credit by calculating a simple interest rate.

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## What is an interest rate calculator?

It is an online tool through which you can calculate a simple interest rate, depending on the conditions of the financial loan.

In the interest rate calculator, you just have to enter the characteristics of your personal loan. And, automatically, you will receive the percentage that you will have to pay to receive the credit .

It is worth mentioning that, this financial calculator allows you to quickly and easily estimate the interest rate of both a loan and a mortgage . Whether you are thinking of applying for one. Or that the fees are already starting to run, and you want to check if what you are paying is what is really due.

## How the tool works

The interest rate calculator is a very easy to use online tool, it will not take you more than a couple of seconds to receive the result. And it is that the system works with only 3 data . That is to say:

• Total amount (EUR) : amount requested.
• Monthly payment (EUR) : the fee you pay month by month.
• Term : how long you have to repay the loan.

The operation is very easy and fast. You do not need more than the information that the same financial institution provides you at the time you request the loan.

## What to consider when using it

There are several points to consider when using an interest rate calculator . Among them:

• The operation of this tool is adapted to different types of loans , as long as the interest is simple . So, you can use it to calculate a simple interest rate for a loan without payroll , personal loan, or other types of financial credits.
• The total amount to be indicated in the first box corresponds to the initial capital that the financial institution is going to grant you. It must be expressed in numbers , not in letters.
• The return period must be stated in months , not indicated in year (s). It is important that you adhere to this guideline so that the calculator can work correctly.
• There are 2 types of interest: effective interest rate (compound interest) and nominal interest rate (simple interest). In this case, the interest rate calculator gives you a simple interest result . If you want to calculate the accumulated interest, you must use another financial tool that you can also find on the web.
• The tool works with the information you provide , so make sure that it is as is your financial loan. Otherwise, the result will not help you manage your finances. Since the percentage will be different.

## Steps to calculate simple interest rate

Taking into account that the operation of the tool itself is very simple, putting it into practice is also very simple. There are only 3 steps that you must do. Being these:

After that, click on the "calculate interest rate" button , and you will receive the percentage of interest that you are going to pay or that you should be paying, if you have already contracted the financial loan.

An easy and very fast process; seconds that will allow you to manage your finances. It is also a valuable tool to compare personal credits and choose the one that is most convenient for you according to your needs and payment possibilities.

## Why is it important to estimate the interest rate of a loan?

The interest rate is what will allow you to determine what is the value attached to a financial loan , which you will have to pay. It is, basically, the price that a lender establishes for granting you a certain amount of money.

For that reason, it is expressed as a percentage , since it measures the consideration of money within the financial category. Just calculating the interest rate serves many purposes for you . For example:

• Estimate how much you will pay to apply for a loan with a certain bank.
• Corroborate how much you are paying at the moment (if you have contracted a loan).
• Compare several financial loans to choose the most attractive one.

Through an interest rate calculator you will get the price you will have to pay for getting a certain amount of money. This, precisely, is what is known as the interest rate.

And, the percentage will be added to the initial capital that the financial institution will grant you, or has already done so.

## Is it necessary to use this online tool to calculate simple interest?

If you want to better manage your finances , yes. Although there are traditional ways (mathematical formulas) to calculate interest rates, this online tool will do everything for you . All you have to do is enter 3 simple data. Based on them, the system will give you a result in a matter of seconds.

It is a quick and simple alternative to estimate this important data that will save you trouble tomorrow. You just have to be precise with the information, since the accuracy of the percentage that the calculator will return will depend on it.

The most important thing is that you use this interest rate calculator as a tool that allows you to make better decisions . Above all, in regard to financing or investment, depending on your case. Since, although it helps you both to estimate, corroborate and compare, its purpose is to know the value of money at a time.

## Practical example on how to use the interest calculator

To make it easier for you to use this tool, let's put a practical example. For this, we have the following random data :

• Total amount expressed in EUR : \$ 2,000.
• Monthly payment expressed in EUR : \$ 323.
• Term expressed in months : 12 months.

Using the financial calculator, the result shows that the price of this loan is 12.01% .

Another practical case that we could consider is a loan with a repayment period of more than one year. For example, an installment loan . For this, we have the following information:

• Total amount expressed in EUR : \$ 6,000.
• Monthly payment expressed in EUR : \$ 415.
• Term expressed in months : 36 months.

In this case, the financial calculator shows that the value of your credit is 6.09% . That is, the additional that would be added to your credit.

## Calculate simple interest with mathematical formula

There are other ways to calculate simple interest rate. One of them would be by means of a mathematical formula, that is, in a traditional way . For this, you would have to take into account what would be the formula to use, and how to use it. Let's take a practical example:

The simple interest formula is: I = C * i * T

Where the initials have the following meaning:

• I: Interest
• C: Capital
• i: Interest rate
• T: Time

For this example, let's take random data :

• C: \$ 15,000.
• i: 7%
• T: 6 months.

Substituting the values:

I = 15,000 * 0.07 * 6 = \$ 6,300

So, you would have to pay a total of \$ 6,300 in interest . Adding it to the initial capital, at the end of the loan you would have to return a total amount of \$ 21,300 to the financial institution.

## Is it the same as a loan simulator?

No! A loan simulator is a much more comprehensive tool, as it allows you to estimate:

• Actual cost of a loan.
• Dues.
• Commissions derived from the borrowed capital.

Basically, it breaks down a loan in detail . So, it is a good support when comparing several financial credits, as it allows you to make a better decision.

In contrast, an interest rate calculator only focuses on the interest rate that will be applied to the total principal granted by a lender. For this, it is based on specific data that you will have to provide. In short, it tells you the percentage to add to the amount of your credit.

Similarly, both are valuable tools . Only, each one fulfills its function.

Calculate simple interest rate allows you to know the price of your loan expressed in a percentage , which would allow you to estimate the total interest expressed in US dollars.

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