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, calculated to pay off the entire loan over the specified tenure.

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 will completely pay off the loan (principal + interest) over the specified tenure.

3. Importance of EMI Calculation

Details: Understanding your EMI helps in financial planning, comparing loan offers, and ensuring the monthly payment fits within your budget before committing to a loan.

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: How does interest rate affect EMI?
A: Higher interest rates increase your EMI amount and total interest payable. Even a small rate difference can significantly impact your total repayment amount.

Q2: What happens if I pay more than the EMI?
A: Additional payments typically reduce the principal faster, potentially shortening your loan tenure or reducing future EMIs.

Q3: Are there other charges besides EMI?
A: Loans may have processing fees, prepayment charges, late payment fees, etc. These are not included in EMI calculation.

Q4: How does loan tenure affect EMI?
A: Longer tenures reduce EMI but increase total interest paid. Shorter tenures mean higher EMIs but less total interest.

Q5: Can EMI change during loan tenure?
A: For fixed-rate loans, EMI remains constant. For floating-rate loans, EMI may change if interest rates change.