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 and converted to decimal)
• \( N \) — Loan tenure in months

Explanation: The formula accounts for compound interest over the loan period, calculating a fixed payment that covers both principal and interest each month.

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 mortgage.

4. Using the Calculator

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

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between fixed and variable rate EMI?
A: Fixed rate EMI remains constant throughout the loan tenure, while variable rate EMI changes when interest rates change.

Q2: How does loan tenure affect EMI?
A: Longer tenures reduce EMI but increase total interest paid. Shorter tenures increase EMI but reduce total interest.

Q3: What factors can change my actual EMI?
A: Changes in interest rates (for variable loans), prepayments, or refinancing can affect your EMI.

Q4: Are there other charges included in EMI?
A: Typically no - EMI includes only principal and interest. Insurance, taxes, and fees are usually separate.

Q5: How accurate is this calculator?
A: It provides standard EMI calculation. Actual EMI may vary slightly based on lender's specific rounding methods.