1. What is EMI?

EMI (Equated Monthly Installment) is the fixed payment amount a borrower pays to a lender each month to clear a loan over the specified tenure. 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
• \( R \) — Monthly interest rate (annual rate ÷ 12 ÷ 100)
• \( N \) — Loan tenure in months

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

3. Importance of EMI Calculation

Details: Understanding your EMI helps in financial planning, comparing loan options, and ensuring the payments fit within your monthly budget.

4. Using the Calculator

Tips: Enter the principal amount, annual interest rate, and loan tenure in months. The calculator will show your monthly EMI, total payment, and total interest.

5. Frequently Asked Questions (FAQ)

Q1: How does interest rate affect EMI?
A: Higher interest rates increase both your EMI and total interest paid. Even a small rate difference can significantly impact total cost.

Q2: Should I choose longer or shorter tenure?
A: Shorter tenure means higher EMI but less total interest. Longer tenure reduces EMI but increases total interest paid.

Q3: Can I prepay my loan to reduce interest?
A: Yes, prepayments reduce principal faster, lowering total interest. Check for prepayment penalties first.

Q4: Why is my first EMI different?
A: First EMI may vary due to loan disbursement date. Some lenders use daily interest for partial months.

Q5: How can I reduce my credit card debt faster?
A: Pay more than minimum due, consolidate high-interest debt, or negotiate for lower rates.