1. What is the EMI Formula?

The EMI (Equated Monthly Installment) formula calculates your fixed monthly payment for loans linked to HDFC FD rates. It considers the principal amount, interest rate, and loan tenure.

2. How Does the Calculator Work?

The calculator uses the standard EMI formula:

Where:

• \( P \) — Principal loan amount (INR)
• \( R \) — Monthly interest rate (annual rate / 12, as decimal)
• \( N \) — Loan tenure in months
• \( EMI \) — Equated monthly installment (INR)

Explanation: The formula accounts for both principal and interest components of your loan payment, with more interest paid initially and more principal paid later.

3. Importance of EMI Calculation

Details: Accurate EMI calculation helps in financial planning, budgeting, and comparing different loan options before borrowing against your HDFC fixed deposit.

4. Using the Calculator

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

5. Frequently Asked Questions (FAQ)

Q1: How is HDFC FD-linked loan interest calculated?
A: Interest rates are typically 1-2% above your FD rate, with EMI calculated on reducing balance method.

Q2: Can I prepay my FD-linked loan?
A: Yes, but terms vary. Some banks charge prepayment penalties while others allow free prepayment with FD closure.

Q3: What happens if FD rates change during loan tenure?
A: For fixed-rate loans, EMI remains unchanged. For floating rates, EMI may adjust with rate changes.

Q4: Is there a minimum loan amount against HDFC FD?
A: Typically 75-90% of FD value, with minimum amounts varying by bank policy.

Q5: How does this compare to personal loans?
A: FD-linked loans usually have lower interest rates than personal loans but require FD as collateral.