We tend to think that everything that involves our finances requires great knowledge, formulas and complex equations. Therefore, many people suffer when **calculating the interest on their loan** . However, the reality is that you can calculate interest on the loan with a formula quite simply.

The first thing we should know is that the fee we pay is composed of two parts: **interest** and **amortization** . It is essential to know that **interest is** always calculated based on the current debt. How does this work? Well, in a very simple way: follow the cited example of edufinet , and imagine that we request a loan of € 12,000 to buy a car , to pay in 5 years, with an interest of 7% and the bank assigns us annual installments of 2,926.69 € Recall that the fee is composed of two parts, so the way to **calculate interest loan formula** would be:

Fee = Interest + amortization

The first year interest will be calculated from the total borrowed. That is, we will pay 7% of € 12,000 = € 840. That means that our amortization to the debt will be the remaining money of our quota: 2,926.69 – 840 = 2,086.69 €.

In the second year we will no longer be € 12,000 but € 9,913.31 and on that amount 7% will be applied: 7% of € 9,913.31 = € 693.93, we subtract these interests from our annual fee and we will obtain the amount which we amortized: € 2,926.69 – € 693.93 = € 2,232.76.

In this way we can calculate the interest on the loan each year.

**How to keep the interests of the loans under control**

In the digital era, many banks, official bodies and private companies have simulators on their websites that help us **calculate the interest on a loan** . A good **simulator for mortgage loans** is offered by Gandalf. It allows obtaining a table of amortizations to observe the evolution of the credit over time. Similarly, the Bank of Spain has a simulator that allows calculating not only **mortgages** , but also **personal loan interests.**

If you are one of those who prefer to have accounts in the palm of the hand on **personal loan interests** , there are very useful mobile applications. The **Bank** has the mobile version of its simulator, which you can download free for IOS and Android. However, if you want something that goes beyond, you can rely on applications such as Tinker-Tracker which allows you to manage several credits at the same time, compare interests, prioritize payments and receive notifications of any changes. On the other hand, if you go the simplest things Tinker-Click can be your perfect ally, because its interface is so simple that even a child could calculate car loan interests.

Now you have in your hands the necessary tools to calculate interest loans and put your account in positive balance. Remember that you do not need great mathematical knowledge to improve your personal economy; the most important thing is to remember that the higher the amount requested, the higher the interest, as the longer the payment time plus interest will be generated.

With the tools described above, you will have control over your accounts, you will **be** able to **calculate the interest on your personal loan** and you will be able to successfully pay off your loans.