1. What is EMI?

EMI (Equated Monthly Installment) is the fixed payment amount a borrower pays to a lender at a specified date each calendar month. For FNB Bank loans in Sri Lanka, EMI payments include both principal and interest components.

2. How Does the Calculator Work?

The calculator uses the standard EMI formula:

Where:

• \( P \) — Principal loan amount (LKR)
• \( R \) — Monthly interest rate (annual rate divided by 12, in decimal)
• \( N \) — Loan tenure in months

Explanation: The formula calculates the fixed monthly payment that would pay off the loan over its term, including both principal and interest.

3. Importance of EMI Calculation

Details: Understanding your EMI helps in financial planning, budgeting, and choosing the right loan tenure. It's crucial for assessing loan affordability before applying with FNB Bank.

4. Using the Calculator

Tips: Enter the principal amount in LKR, annual interest rate (as offered by FNB Bank), and loan tenure in months. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What factors affect EMI?
A: EMI depends on loan amount, interest rate, and tenure. Higher principal or rates increase EMI, while longer tenures reduce EMI but increase total interest.

Q2: Are there any additional charges?
A: FNB Bank may charge processing fees, insurance, or other costs. These are not included in the EMI calculation.

Q3: How does prepayment affect EMI?
A: Prepayment reduces principal, which may lower EMI or shorten tenure. Check FNB Bank's prepayment policies.

Q4: What's the difference between reducing balance and flat rate?
A: This calculator uses reducing balance method (standard in Sri Lanka), where interest is calculated on outstanding principal. Flat rate calculates interest on full principal for entire tenure.

Q5: How accurate is this calculator?
A: It provides estimates based on inputs. Actual FNB Bank loan terms may vary based on credit assessment and current offers.