1. What is the EMI Formula?

The EMI (Equated Monthly Installment) formula calculates the fixed payment amount a borrower pays to the lender each month. It consists of both principal and interest components.

2. How Does the Calculator Work?

The calculator uses the standard EMI formula:

Where:

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

Explanation: The formula accounts for compound interest over the loan period, ensuring each payment has the same proportion of principal and interest.

3. Importance of EMI Calculation

Details: Accurate EMI calculation helps borrowers understand their monthly financial commitment, compare loan offers, and plan their budgets effectively.

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: How is ICICI Bank's car loan interest calculated?
A: ICICI uses reducing balance method where interest is calculated on the outstanding principal each month.

Q2: What factors affect my car loan EMI?
A: Principal amount, interest rate, and loan tenure are the primary factors. Processing fees and insurance may add to the cost.

Q3: Can I prepay my ICICI car loan?
A: Yes, but prepayment charges may apply depending on the loan terms and timing of prepayment.

Q4: How does increasing tenure affect my loan?
A: Longer tenure reduces EMI but increases total interest paid. Shorter tenure means higher EMI but less total interest.

Q5: Are there any hidden charges in ICICI car loans?
A: There may be processing fees, documentation charges, and insurance requirements. Always read the loan agreement carefully.