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's used to pay off both interest and principal each month so that over time, the loan is paid off in full.

2. How EMI Calculation Works

The calculator uses the standard EMI formula:

Where:

• \( P \) — Principal loan amount (₹)
• \( R \) — 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 with interest over the specified period.

3. Understanding the Formula

Details: The numerator calculates the monthly interest on the outstanding principal, while the denominator accounts for the compounding effect over the loan tenure.

4. Using the Calculator

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

5. Frequently Asked Questions (FAQ)

Q1: How does EMI change with tenure?
A: Longer tenures reduce EMI but increase total interest paid. Shorter tenures increase EMI but reduce total interest.

Q2: What are ICICI Bank's current interest rates?
A: ICICI's rates vary (8.5%-14% for personal loans, 6.7%-7.7% for home loans). Check their website for current rates.

Q3: Can I prepay my ICICI loan?
A: Yes, but prepayment charges may apply after 1 year (0-5% depending on loan type and tenure).

Q4: How is interest calculated monthly?
A: Interest is calculated daily on the reducing balance and compounded monthly.

Q5: What affects EMI amount?
A: Principal amount, interest rate, and loan tenure are the three key factors determining EMI.