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HDFC Bank Personal Loan EMI Calculator ICICI

EMI Formula:

\[ EMI = \frac{P \times R \times (1+R)^N}{(1+R)^N - 1} \]

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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. It includes both principal and interest components.

2. How Does the EMI Calculator Work?

The calculator uses the standard EMI formula:

\[ EMI = \frac{P \times R \times (1+R)^N}{(1+R)^N - 1} \]

Where:

Explanation: The formula calculates the fixed monthly payment that would pay off the loan over its term with equal monthly payments.

3. Importance of EMI Calculation

Details: Knowing your EMI helps in financial planning, comparing loan offers, and determining affordability before taking a loan.

4. Using the Calculator

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

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between reducing balance and flat rate EMI?
A: This calculator uses reducing balance method where interest is calculated on outstanding principal. Flat rate calculates interest on original principal throughout.

Q2: How does tenure affect EMI?
A: Longer tenure reduces EMI but increases total interest paid. Shorter tenure means higher EMI but less total interest.

Q3: Are there any prepayment charges?
A: HDFC/ICICI may charge 0-5% for prepayment. Check with your bank for exact charges.

Q4: What factors affect personal loan interest rates?
A: Credit score, income, employment history, loan amount, and relationship with bank affect rates.

Q5: Can I get EMI holidays?
A: Some banks offer initial EMI-free periods, but interest continues to accrue during this time.

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