when & how interest on unsecured loan is calculated?



when & how interest on unsecured loan is calculated?..

Answer / Prashant Gangwar

Interest on an unsecured loan is typically calculated using a simple interest formula or, more commonly, a compound interest formula. The interest rate and the principal amount are multiplied by the number of periods (usually months or years) to determine the total interest owed. Some lenders may also apply fees or charges for processing and administrative purposes.

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