How loan tenure is calculated

The loan tenure is the number of payment periods (usually months) needed to reduce your loan balance to zero. When you make fixed monthly payments on a standard amortizing loan, each payment is split into: interest (the cost of borrowing for that month) and principal (the amount that actually reduces what you owe).

• P = principal (loan amount)
• APR = annual percentage rate (interest rate per year)
• r = monthly interest rate = APR / 12 / 100
• PMT = monthly payment (EMI)
• N = number of months (tenure in months)

If you know your monthly payment and want to know how long the loan will take to pay off, we use the standard amortization inversion:

• If r = 0 (0% APR): N = P / PMT
• If r > 0: N = -ln(1 - r·P / PMT) / ln(1 + r)

The logic behind this formula is simple: to pay off the loan, your payment must be large enough to cover the month’s interest and reduce principal. That requirement is: PMT > r·P. If it’s not true, interest alone consumes the payment and the balance does not shrink.

If you know your desired tenure and want the monthly payment required to achieve it, the payment formula is:

• If r = 0: PMT = P / N
• If r > 0: PMT = P·r / (1 - (1 + r)^-N)

Once we know N, we estimate: Total paid = PMT · N and Total interest = Total paid - P. For the payoff date, we add N months to your selected start month.

Real examples you can copy

These examples show why “tenure” is such a powerful lever. Two people can borrow the same amount at the same APR, yet pay very different total interest depending on how quickly they repay.

• Loan amount: $15,000
• APR: 9.5% → monthly rate r ≈ 0.095/12
• Monthly payment: $350
• Result: you’ll see a payoff time (months/years) + total interest estimate.

• Loan amount: $20,000
• APR: 7%
• Tenure: 3 years (36 months)
• Result: calculator returns a required monthly payment to hit that timeline.

Try this inside the calculator: set a payment, then compare it to payment +10%. You’ll often discover that a small increase can remove months (or even years) and cut interest dramatically.

How to use the Loan Tenure Calculator (step-by-step)

• Step 1: Choose your mode: “Payment → Tenure” (most common) or “Tenure → Payment”.
• Step 2: Enter your loan amount (principal) and APR.
• Step 3: Enter either monthly payment (if you’re finding tenure) or tenure in years (if you’re finding payment).
• Step 4: Optionally choose a start month to get an estimated payoff date.
• Step 5: Tap Calculate. Save scenarios to compare, and use the share buttons for quick screenshots.

• Credit cards and personal loans: “How long will it take if I pay $X?”
• Auto loans: compare 48 months vs 60 months vs 72 months.
• Student loans: plan payment strategies and see interest impact.
• Refinancing decisions: see how changing APR affects payoff timeline.

Frequently Asked Questions

• What does “loan tenure” mean?

  Loan tenure is the length of time it takes to repay a loan. In this calculator, it’s shown in months and years based on your principal, APR, and monthly payment.

• Why does the calculator say my loan will “never pay off”?

  Because your payment is too low. If your monthly payment is less than (or equal to) the monthly interest (r·P), the balance won’t decrease. You’ll need to raise the payment or lower the APR.

• Is APR the same as the monthly interest rate?

  Not exactly. APR is annual. For standard monthly calculations, we convert to a monthly rate: r = APR / 12 / 100. Some lenders compound differently, which can cause slight differences.

• Does extra payment reduce tenure or monthly payment?

  If you keep the same monthly payment but add extra money toward principal, tenure usually drops. If you refinance and recast a loan, monthly payment might drop instead. This calculator focuses on fixed-payment payoff time.

• Can I use this for mortgage loans?

  Yes for “plain” amortizing mortgages, but mortgages can include escrow, PMI, fees, and rate changes. For more detail, use our Mortgage Payment and Refinance calculators too.