1. What is EMI Calculation?

The EMI (Equated Monthly Installment) calculation helps determine the fixed monthly payment amount for a loan to consolidate credit card debt. It includes both principal and interest components.

2. How Does the Calculator Work?

The calculator uses the standard EMI formula:

Where:

• \( P \) — Principal loan amount
• \( R \) — Monthly interest rate (annual rate ÷ 12)
• \( N \) — Loan tenure in months
• \( EMI \) — Equated monthly installment

Explanation: The formula calculates the fixed payment amount that includes both principal repayment and interest charges each month.

3. Importance of EMI Calculation

Details: Understanding your EMI helps in budgeting for debt consolidation, comparing loan offers, and planning your finances to avoid default.

4. Using the Calculator

Tips: Enter the total amount you want to borrow, the annual interest rate, and the repayment period in months. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How does loan tenure affect EMI?
A: Longer tenures reduce monthly EMI but increase total interest paid. Shorter tenures mean higher EMI but lower total interest.

Q2: What's a good interest rate for debt consolidation?
A: Ideally lower than your current credit card rates (typically 12-24% APR). Rates below 10% APR are considered good.

Q3: Should I choose the longest tenure available?
A: Not necessarily. While it lowers monthly payments, you'll pay more interest overall. Choose the shortest tenure you can comfortably afford.

Q4: Are there other costs besides EMI?
A: Yes, some loans have processing fees, prepayment charges, or late payment penalties. Always read the fine print.

Q5: Can I prepay my loan?
A: Most lenders allow prepayment, sometimes with a fee. Prepaying reduces total interest and can shorten loan tenure.