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Philippine Bank Loan Calculator

EMI Formula:

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

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months

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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 commonly used for bank loans in the Philippines to repay both principal and interest each month.

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 payment amount that includes both principal repayment and interest charges.

3. Importance of EMI Calculation

Details: Calculating EMI helps borrowers understand their monthly obligations, compare loan offers, and plan their finances before committing to a loan.

4. Using the Calculator

Tips: Enter principal 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 is a typical interest rate in the Philippines?
A: Personal loan rates typically range from 6% to 24% annually depending on the bank, loan type, and borrower's creditworthiness.

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

Q3: Are there other charges not included in EMI?
A: Some loans may have processing fees, insurance, or other charges not reflected in the EMI calculation.

Q4: Can I prepay my loan?
A: Most Philippine banks allow prepayment but may charge a fee. Prepayment reduces total interest paid.

Q5: How accurate is this calculator?
A: This provides a standard EMI calculation. Actual loan terms may vary based on bank policies and your credit profile.

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