1. What is EMI Calculation?

EMI (Equated Monthly Installment) is the fixed payment amount a borrower pays to a lender each month for a loan. This calculator helps determine monthly payments for loans from credit banks in the Philippines.

2. How Does the Calculator Work?

The calculator uses the standard EMI formula:

Where:

• \( P \) — Principal loan amount (PHP)
• \( R \) — 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 payment, with interest being front-loaded in the payment schedule.

3. Importance of EMI Calculation

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

4. Using the Calculator

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

5. Frequently Asked Questions (FAQ)

Q1: What is the typical interest rate for credit bank loans in Philippines?
A: Rates vary but typically range from 5% to 20% annually depending on loan type, tenure, and borrower's credit profile.

Q2: How does loan tenure affect EMI?
A: Longer tenures reduce EMI but increase total interest paid. Shorter tenures have higher EMIs but lower total interest.

Q3: Are there other charges besides interest?
A: Some banks may charge processing fees, insurance, or late payment penalties. These are not included in EMI calculation.

Q4: Can I prepay my loan?
A: Most banks allow prepayment but may charge a fee. Prepayment reduces total interest paid.

Q5: How accurate is this calculator?
A: This provides a close estimate, but actual EMI may vary slightly due to rounding methods or additional charges by banks.