1. What is EMI?

EMI (Equated Monthly Installment) is the fixed payment amount made by a borrower to a lender at a specified date each calendar month. 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 (INR)
• \( R \) — Monthly interest rate (annual rate divided by 12, in decimal)
• \( N \) — Loan tenure in months
• \( EMI \) — Equated monthly installment (INR)

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

3. Importance of EMI Calculation

Details: Calculating EMI helps borrowers understand their monthly financial commitment, compare loan offers, and plan their finances accordingly.

4. Using the Calculator

Tips: Enter the 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: What factors affect EMI amount?
A: EMI depends on three factors - principal amount, interest rate, and loan tenure. Higher principal or rate increases EMI, while longer tenure reduces EMI.

Q2: How does prepayment affect EMI?
A: Prepayment reduces the principal, which can either reduce EMI or shorten loan tenure, depending on the terms.

Q3: What is the difference between reducing balance and flat rate?
A: This calculator uses reducing balance method where interest is calculated on outstanding principal. Flat rate calculates interest on full principal for entire tenure.

Q4: Are there any hidden charges in EMI?
A: This calculator shows pure EMI. Actual loans may include processing fees, insurance, or other charges not reflected here.

Q5: Can I change EMI during loan tenure?
A: Typically EMI remains fixed, but some lenders offer step-up/step-down EMI options or allow restructuring under special circumstances.