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 Does the Calculator Work?

The calculator uses the standard EMI formula:

Where:

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

Explanation: The formula calculates the fixed monthly payment that would completely pay off the loan over its term, including both principal and interest components.

3. Importance of EMI Calculation

Details: Understanding your EMI helps in financial planning, comparing loan offers, and determining affordability before refinancing or taking a new mortgage.

4. Using the Calculator

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

5. Frequently Asked Questions (FAQ)

Q1: How does refinancing affect my EMI?
A: Refinancing at a lower interest rate typically reduces your EMI or allows you to pay off the loan faster with the same EMI.

Q2: What factors can change my EMI amount?
A: EMI depends on loan amount, interest rate, and tenure. Changes to any of these will affect your EMI.

Q3: Is a lower EMI always better?
A: Not necessarily. A longer tenure with lower EMI means paying more interest overall. Consider total interest paid.

Q4: Can I prepay my loan to reduce EMI?
A: Prepayment typically reduces tenure rather than EMI, unless you specifically request to recast your loan.

Q5: How accurate is this calculator?
A: This provides standard EMI calculation. Actual loan terms may include additional fees or charges.