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. EMIs are 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 ÷ 12 ÷ 100)
• \( N \) — 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 Loan Components

Principal: The original loan amount borrowed.
Interest: The cost of borrowing the principal amount.
Tenure: The repayment period in months.
Total Payment: Principal + Total Interest paid over the loan term.

4. Using the Calculator

Tips: Enter 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 reducing tenure affect EMI?
A: Shorter tenure increases EMI but reduces total interest paid. Longer tenure reduces EMI but increases total interest.

Q2: What factors affect EMI amount?
A: Principal amount, interest rate, and loan tenure are the three key factors that determine EMI.

Q3: Can I prepay my ICICI loan?
A: Yes, ICICI Bank allows prepayment, though terms may vary by loan type. Prepayment reduces total interest.

Q4: Are there other charges besides EMI?
A: Some loans may have processing fees, prepayment charges, or late payment fees.

Q5: How can I reduce my EMI burden?
A: You can reduce EMI by negotiating lower interest rates, extending tenure, or making a larger down payment.