1. What is the EMI Formula?

The EMI (Equated Monthly Installment) formula calculates the fixed payment amount a borrower pays each month to repay a car loan. It considers the principal amount, interest rate, and loan tenure.

2. How Does the Calculator Work?

The calculator uses the standard EMI formula:

Where:

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

Explanation: The formula accounts for both principal and interest components of the loan payment, which changes over time with a fixed EMI amount.

3. Importance of EMI Calculation

Details: Calculating EMI helps borrowers understand their monthly financial commitment, compare loan offers, and plan their budget effectively before taking a car loan.

4. Using the Calculator

Tips: Enter the loan amount in PHP, 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 my car loan EMI?
A: EMI depends on loan amount, interest rate, and tenure. Higher loan amounts or rates increase EMI, while longer tenures reduce EMI but increase total interest.

Q2: How is the interest calculated for car loans?
A: Maybank uses reducing balance method where interest is calculated on the outstanding principal each month.

Q3: Can I prepay my car loan?
A: Yes, but check for prepayment charges. Early repayment can save on interest costs.

Q4: What's the typical loan tenure for car loans?
A: Usually 1-7 years (12-84 months), depending on the car's age and bank policies.

Q5: Are there other charges besides interest?
A: Yes, may include processing fees, insurance, and documentation charges which aren't part of EMI calculation.