1. What is EMI?

EMI (Equated Monthly Installment) is the fixed payment amount a borrower makes to a lender each month to repay a loan. It includes both principal and interest components.

2. How Does the Calculator Work?

The calculator uses the EMI formula:

Where:

• \( P \) — Principal loan amount
• \( R \) — Monthly interest rate (APR/12 as decimal)
• \( N \) — Loan tenure in months

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

3. Understanding Credit Card Interest

Details: Credit card loans typically have higher interest rates than other loan types. The APR (Annual Percentage Rate) includes both interest and fees, expressed as a yearly rate.

4. Using the Calculator

Tips: Enter the principal amount, APR (without the % sign), and loan duration in months. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How is APR different from interest rate?
A: APR includes both the interest rate and any additional fees charged by the lender, giving a more complete picture of borrowing costs.

Q2: What happens if I pay more than the EMI?
A: Extra payments typically reduce the principal faster, saving interest and potentially shortening the loan term.

Q3: Why are credit card interest rates higher?
A: Credit cards are unsecured debt with higher risk for lenders, resulting in higher rates compared to secured loans.

Q4: How can I reduce my EMI payments?
A: You can reduce EMI by negotiating a lower APR, extending the loan term, or borrowing a smaller amount.

Q5: Does this calculator account for fees?
A: This calculates based on APR which should include fees, but check with your lender for any additional charges.