Simple Interest Calculator – Calculate Interest & Amount
Simple Interest Calculator
Calculate simple interest and the total amount repayable for any period in years, months or days.
Calculate Simple Interest
Enter principal, rate and time. Results update as you type.
Simple interest is the plainest form of interest there is: it's charged once, on the original amount, for the length of time you hold the money, and it never compounds on itself. This simple interest calculator gives you the exact figure instantly, but it's worth knowing where simple interest actually shows up in real lending, because it's rarer than most people assume.
The simple interest formula
P is the principal, R is the annual interest rate and T is the time in years. That's the whole formula: no compounding, no monthly breakdown, no reducing balance. The amount you owe at the end is just P + SI.
Where simple interest is actually used
Most loans and FDs you'll deal with in India (home loans, personal loans, car loans, cumulative fixed deposits) run on compound or reducing-balance interest, not simple interest. But there's one common product where simple interest is the standard pricing method: bullet-repayment gold loans.
Under a bullet repayment gold loan scheme, you don't pay monthly instalments at all. You repay the entire principal plus interest in one go, at the end of the tenure. Because there's no monthly repayment schedule to run compounding math against, banks price these as flat simple interest on the original amount for the full period. SBI's 6-month bullet gold loan scheme, for example, runs at roughly 8.90% p.a. as of August 2026.
A worked example
Say you take a gold loan of ₹2,00,000 against jewellery, on a 6-month bullet repayment scheme at 8.90% p.a.
- Time in years: 6 months = 0.5 years.
- Run the formula: SI = (2,00,000 × 8.90 × 0.5) / 100 = ₹8,900.
You'd repay ₹2,08,900 in a single payment at the end of the 6 months: ₹2,00,000 principal plus ₹8,900 interest, with nothing compounding along the way. The calculator above is pre-filled with these numbers. Replace them with your own gold loan quote to check the number your lender gives you.
Simple interest vs compound interest
The difference matters more the longer the money is held. Over short periods, like the few months of a bullet gold loan, simple and compound interest land close to each other, because there isn't much time for compounding to make a difference. Over years, they diverge sharply: compound interest earns (or costs) interest on interest, while simple interest never does. Our guide on simple vs compound interest walks through the exact gap with worked examples. If you're comparing a short-term simple interest product against a longer-term compounding one, don't compare the rates directly. Compare the actual rupee cost using both calculators.
Frequently Asked Questions
Is simple interest better or worse than compound interest for a borrower?
Neither, on its own. It depends on the rate and tenure. Simple interest doesn't punish you for a longer loan the way compounding can, but lenders who offer simple interest on lending products often price the base rate slightly higher to compensate. Always compare the actual amount repayable, not just the interest method.
Do banks ever pay simple interest on deposits?
Rarely for standard fixed deposits. SBI and most major banks compound FD interest quarterly for tenures of 6 months and above. Simple interest on deposits mostly shows up on very short-tenure deposits (under 6 months) or specific small-savings instruments. If you're comparing a simple-interest quote against a reducing-balance loan, our loan interest calculator shows the actual total interest a reducing-balance loan would charge.
This shows you the interest math. Exact rates, eligibility and final terms depend on your lender and your credit profile.