1. What is EMI Calculation?

EMI (Equated Monthly Installment) is the fixed payment amount made by a borrower to a lender at a specified date each calendar month. It's used to pay off both interest and principal each month so that over the loan term, the loan is paid off in full.

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

Explanation: The formula calculates the fixed payment amount that includes both principal and interest components for each month of the loan term.

3. Importance of EMI Calculation

Details: Accurate EMI calculation helps borrowers understand their repayment obligations, plan their finances, and compare different loan options before committing to a mortgage.

4. Using the Calculator

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

5. Frequently Asked Questions (FAQ)

Q1: What happens if I pay more than the EMI amount?
A: Additional payments typically go toward the principal, reducing your total interest and potentially shortening the loan term.

Q2: Does EMI remain constant throughout the loan term?
A: For fixed-rate loans, yes. For adjustable-rate mortgages, EMI may change when interest rates adjust.

Q3: What's included in EMI payments?
A: EMI typically includes principal and interest. Property taxes and insurance may be separate or included, depending on the loan structure.

Q4: How does loan tenure affect EMI?
A: Longer tenures reduce EMI but increase total interest paid. Shorter tenures increase EMI but reduce total interest.

Q5: Can I prepay my mortgage?
A: Most loans allow prepayment, but some may have prepayment penalties. Check your loan terms.