Average Loan Tenure Calculator

Formula

The formula to calculate the loan tenure (T) is:

\[ T = \frac{L}{P} \]

Where:

Average Loan Tenure: Refers to the average length of time over which a loan is scheduled to be repaid. This period is typically expressed in months or years and is determined based on the total loan amount and the monthly payment agreed upon by the borrower and the lender. The loan tenure can vary significantly depending on the type of loan, the amount borrowed, and the borrower’s financial situation. Understanding the loan tenure is crucial for borrowers to plan their finances and ensure they can meet their repayment obligations.

Let's say the total loan amount (L) is $10,000 and the monthly payment (P) is $500. Using the formula:

\[ T = \frac{10000}{500} \]

We get:

\[ T = 20\, \text{months} \]

So, the loan tenure is 20 months.