1. What is Loan Tenure?

Loan tenure refers to the duration over which a loan is scheduled to be repaid. It's typically expressed in months or years and affects both your monthly payment amount and total interest paid.

2. How Does the Calculator Work?

The calculator uses the loan tenure formula:

Where:

• \( PMT \) — Monthly payment amount (USD)
• \( P \) — Principal loan amount (USD)
• \( r \) — Monthly interest rate (decimal)

Explanation: The formula calculates how many months it will take to pay off a loan given fixed monthly payments, accounting for the compounding interest.

3. Importance of Loan Tenure Calculation

Details: Understanding loan tenure helps borrowers plan their finances, compare loan options, and determine the optimal balance between monthly payment affordability and total interest paid.

4. Using the Calculator

Tips: Enter the fixed monthly payment amount, principal loan amount, and monthly interest rate (as decimal). All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How do I convert annual rate to monthly rate?
A: Divide the annual percentage rate (APR) by 12 (months) and by 100 (to convert from percentage to decimal).

Q2: What if my payments change over time?
A: This calculator assumes fixed payments. For variable-rate loans, the calculation would be more complex.

Q3: Why does the formula use logarithms?
A: Logarithms are used to solve for time in compound interest equations, which is how most loans work.

Q4: Can I use this for mortgage calculations?
A: Yes, this formula works for any fixed-rate amortizing loan, including mortgages.

Q5: What if my result isn't a whole number?
A: Loan terms are typically rounded up to whole months, with a final smaller payment if needed.