1. What is EMI Calculation?

The EMI (Equated Monthly Installment) calculation helps determine the fixed monthly payment for a consolidation loan that combines multiple credit card debts into one loan. 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 (consolidated debt)
• \( R \) — Monthly interest rate (annual rate divided by 12)
• \( N \) — Loan tenure in months

Explanation: The formula calculates the fixed monthly payment that would pay off the loan over the specified period with interest.

3. Importance of EMI Calculation

Details: Calculating EMI helps borrowers understand their monthly obligations, compare different loan options, and plan their finances when consolidating credit card debt.

4. Using the Calculator

Tips: Enter the total amount you want to consolidate, the annual interest rate offered, and the repayment period in months. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is credit card consolidation?
A: It's combining multiple credit card balances into a single loan, typically with a lower interest rate and fixed repayment schedule.

Q2: How does EMI differ from minimum payments?
A: EMI pays off the debt in full by the end of the term, while minimum payments extend the debt indefinitely and cost more in interest.

Q3: What factors affect my EMI amount?
A: Principal amount, interest rate, and loan term are the main factors. Higher rates or shorter terms increase EMI, while lower rates or longer terms decrease it.

Q4: Is consolidation always better?
A: It depends on the terms. Compare total interest costs between your current debts and the consolidation loan.

Q5: Can I prepay my consolidation loan?
A: This depends on the lender's terms. Some allow prepayment with no penalty, while others charge fees.