1. What is EMI?

EMI (Equated Monthly Installment) is the fixed payment amount made by a borrower to a lender at a specified date each calendar month. It includes both principal and interest components.

2. How Does the Calculator Work?

The calculator uses the standard EMI formula:

Where:

• \( P \) — Principal loan amount (ZAR)
• \( R \) — Monthly interest rate (annual rate / 12 / 100)
• \( N \) — Loan tenure in months

Explanation: The formula calculates the fixed monthly payment that would completely pay off the loan over its term, accounting for compound interest.

3. Importance of EMI Calculation

Details: Understanding your EMI helps in financial planning, comparing loan offers, and ensuring the monthly payment fits within your budget before committing to a loan.

4. Using the Calculator

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

5. Frequently Asked Questions (FAQ)

Q1: What affects my EMI amount?
A: EMI depends on three factors - loan amount, interest rate, and loan term. Higher amounts/rates increase EMI, while longer terms reduce EMI but increase total interest.

Q2: Can I change EMI during loan tenure?
A: EMI generally remains fixed for fixed-rate loans. For floating rates, EMI may change if interest rates change.

Q3: How does prepayment affect EMI?
A: Prepayment can either reduce your EMI (if you keep the same term) or shorten your loan term (if you keep the same EMI).

Q4: Are there other charges besides EMI?
A: Loans may have processing fees, insurance, or other charges. These are not included in EMI calculation.

Q5: How accurate is this calculator?
A: This provides standard EMI calculation. Actual EMI may vary slightly based on the bank's specific rounding policies.