How to Calculate Student Loan Formula?

Calculating a student loan involves determining the monthly repayment amount based on the principal, interest rate, and loan tenure. The most common formula used is the EMI (Equated Monthly Installment) formula:

EMI=P×r×(1+r)n(1+r)n−1EMI=(1+r)n−1P×r×(1+r)n

Where:

• P = Principal loan amount
• r = Monthly interest rate (annual rate ÷ 12)
• n = Total number of monthly payments (loan tenure in months)

This formula calculates the fixed monthly payment that covers both principal and interest over the loan period. Student loan calculators use this formula to provide quick estimates of your monthly payments, total interest payable, and overall cost of the loan.