1. What is the EMI Calculation?

The EMI (Equated Monthly Installment) calculation helps determine the fixed payment amount a borrower makes each month to repay a loan. It's particularly useful for refinancing credit card debt into a more manageable installment loan.

2. How Does the Calculator Work?

The calculator uses the standard EMI formula:

Where:

• \( P \) — Principal loan amount
• \( R \) — Monthly interest rate (annual rate divided by 12, in decimal)
• \( N \) — Loan tenure in months
• \( EMI \) — Equated monthly installment

Explanation: The formula accounts for both principal repayment and interest payment components in each installment.

3. Importance of EMI Calculation

Details: Calculating EMI helps borrowers understand their monthly payment obligations and compare different loan options when refinancing debt.

4. Using the Calculator

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

5. Frequently Asked Questions (FAQ)

Q1: Why refinance credit card debt with a loan?
A: Personal loans often have lower interest rates than credit cards, potentially saving money and providing fixed repayment terms.

Q2: What's included in the EMI payment?
A: Each EMI payment includes both principal repayment and interest charges for that period.

Q3: How does loan tenure affect EMI?
A: Longer tenures reduce EMI but increase total interest paid. Shorter tenures increase EMI but reduce total interest.

Q4: Are there other costs besides EMI?
A: Some loans may have processing fees or prepayment penalties not reflected in the EMI calculation.

Q5: How accurate is this calculator?
A: It provides standard EMI calculation but actual loan terms may vary based on lender policies and creditworthiness.