Home Back

Note Personal Promissory Calculator India

Personal Promissory Note Payment Formula:

\[ Payment = P \times \frac{r(1 + r)^n}{(1 + r)^n - 1} \]

INR
%
months

Unit Converter ▲

Unit Converter ▼

From: To:

1. What is a Personal Promissory Note?

A personal promissory note is a legal document where one party promises to pay another party a definite sum of money, either on demand or at a specified future date, with interest. In India, these are commonly used for personal loans between individuals.

2. How Does the Calculator Work?

The calculator uses the standard loan payment formula:

\[ Payment = P \times \frac{r(1 + r)^n}{(1 + r)^n - 1} \]

Where:

Explanation: This formula calculates the fixed monthly payment required to fully repay a loan with interest over its term.

3. Importance of Payment Calculation

Details: Accurate payment calculation ensures both lender and borrower understand repayment terms, helps in financial planning, and ensures compliance with Indian lending laws.

4. Using the Calculator

Tips: Enter principal in INR, annual interest rate in percentage, and loan term in months. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Is this calculator specific to India?
A: While the formula is universal, this calculator uses INR currency and accounts for common Indian lending practices.

Q2: What's the maximum interest rate allowed in India?
A: As per RBI guidelines, interest rates should not exceed prevailing market rates. Currently, unsecured personal loans typically range between 10-24% p.a.

Q3: Are promissory notes legally binding in India?
A: Yes, under the Negotiable Instruments Act, 1881, properly executed promissory notes are legally enforceable.

Q4: Should stamp duty be paid on promissory notes?
A: Yes, in India promissory notes must be stamped as per the Indian Stamp Act. Rates vary by state.

Q5: Can this be used for business loans?
A: While the calculation is similar, business loans may have different terms and tax implications.

Note Personal Promissory Calculator India© - All Rights Reserved 2025