Credit Card Calculator Extra Payments on Mortgage

EMI Calculation After Extra Payments:

\[ EMI_{new} = \frac{(P - E) \times R \times (1+R)^{(N - M)}}{(1+R)^{(N - M)} - 1} \]

Original Principal (P):

Extra Payment Amount (E):

Annual Interest Rate (APR):

Original Loan Tenure (N):

months

Months Paid (M):

months

New EMI After Extra Payment:

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1. What is the EMI Calculation After Extra Payments?

This calculator determines your new Equated Monthly Installment (EMI) after making extra payments on your mortgage or loan. It helps you understand how additional payments can reduce your monthly burden.

2. How Does the Calculator Work?

The calculator uses the following equation:

\[ EMI_{new} = \frac{(P - E) \times R \times (1+R)^{(N - M)}}{(1+R)^{(N - M)} - 1} \]

Where:

\( P \) — Original principal amount
\( E \) — Extra payment amount
\( R \) — Monthly interest rate (APR/12)
\( N \) — Original loan tenure in months
\( M \) — Months already paid

Explanation: The equation recalculates your monthly payment based on the reduced principal after extra payment and remaining loan term.

3. Importance of Extra Payments

Details: Making extra payments can significantly reduce your total interest paid and shorten your loan term. This calculator shows the immediate impact on your monthly payments.

4. Using the Calculator

Tips: Enter your original loan amount, the extra payment you plan to make, your APR, original loan term, and how many months you've already paid. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How do extra payments affect my loan?
A: Extra payments reduce your principal faster, which can either lower your monthly payments or shorten your loan term, depending on how the payments are applied.

Q2: Should I make extra payments or invest?
A: This depends on your loan interest rate vs. potential investment returns. Paying off high-interest debt often provides better guaranteed returns.

Q3: Are there penalties for extra payments?
A: Some loans have prepayment penalties. Check your loan terms before making extra payments.

Q4: How often can I make extra payments?
A: This depends on your lender's policies. Some allow unlimited extra payments, others may have restrictions.

Q5: Does this calculator account for changing interest rates?
A: No, this assumes a fixed interest rate. For adjustable-rate loans, results would vary when rates change.