1. What is the EMI Formula?

The EMI (Equated Monthly Installment) formula calculates the fixed payment amount a borrower pays each month to repay a loan. It's commonly used for personal loans in India, especially for refinancing calculations.

2. How Does the Calculator Work?

The calculator uses the standard EMI formula:

Where:

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

Explanation: The formula accounts for both principal and interest components of the loan, with interest being front-loaded in the initial payments.

3. Importance of EMI Calculation

Details: Accurate EMI calculation helps borrowers understand their monthly obligations, compare loan offers, and plan their finances when refinancing personal loans in India.

4. Using the Calculator

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

5. Frequently Asked Questions (FAQ)

Q1: What is refinancing a personal loan?
A: Refinancing means replacing an existing loan with a new one, typically to get better terms like lower interest rate or longer tenure.

Q2: How does EMI change with tenure?
A: Longer tenures reduce EMI but increase total interest paid. Shorter tenures increase EMI but reduce total interest.

Q3: What factors affect EMI?
A: Principal amount, interest rate, and loan tenure are the three main factors that determine EMI.

Q4: Are there prepayment charges in India?
A: Many Indian lenders charge prepayment penalties, especially on fixed-rate loans. Check with your lender.

Q5: How accurate is this calculator?
A: This provides a standard EMI calculation. Actual loans may have processing fees or other charges affecting total cost.