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Kotak Bank Loan Calculator

EMI Formula:

\[ EMI = \frac{P \times R \times (1+R)^N}{(1+R)^N - 1} \]

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1. What is the EMI Formula?

The EMI (Equated Monthly Installment) formula calculates the fixed payment amount a borrower pays to the bank each month. It includes both principal and interest components.

2. How Does the Calculator Work?

The calculator uses the standard EMI formula:

\[ EMI = \frac{P \times R \times (1+R)^N}{(1+R)^N - 1} \]

Where:

Explanation: The formula calculates the fixed monthly payment that will completely pay off the loan over its term.

3. Importance of EMI Calculation

Details: Knowing your EMI helps in financial planning and determining loan affordability. It shows how much you'll pay monthly and the total interest over the loan term.

4. Using the Calculator

Tips: Enter 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: What factors affect EMI?
A: EMI depends on loan amount, interest rate, and loan tenure. Higher principal or rate increases EMI, while longer tenure reduces EMI but increases total interest.

Q2: How can I reduce my EMI?
A: You can reduce EMI by either negotiating a lower interest rate or opting for a longer repayment tenure.

Q3: Does EMI remain constant?
A: For fixed-rate loans, EMI remains constant. For floating-rate loans, EMI may change when interest rates change.

Q4: What is prepayment?
A: Paying more than your EMI reduces principal faster, saving interest. Kotak Bank may charge prepayment penalties on some loans.

Q5: How is interest calculated?
A: Interest is calculated monthly on the outstanding principal. Early in the loan, most of your EMI goes toward interest.

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