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 (Rs)
• \( R \) — Monthly interest rate (annual rate divided by 12 and converted to 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 tenure.

3. Understanding Loan Components

Principal: The original sum of money borrowed.
Interest Rate: The cost of borrowing the principal amount.
Tenure: The duration over which the loan will be repaid.

4. Using the Calculator

Tips: Enter the 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 does reducing tenure affect EMI?
A: Shorter tenure increases EMI but reduces total interest paid over the loan period.

Q2: What factors affect EMI amount?
A: EMI depends on principal amount, interest rate, and loan tenure.

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

Q4: How is interest calculated between EMIs?
A: Interest is calculated on the reducing balance method.

Q5: Are there any hidden charges in EMI?
A: Processing fees and other charges are typically not included in EMI calculation.