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. For hire purchase loans, this includes both principal and interest components.

2. How Does the Calculator Work?

The calculator uses the standard EMI formula:

Where:

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

Explanation: The formula calculates the fixed monthly payment that would pay off the loan over the specified period, including both principal and interest.

3. Importance of EMI Calculation

Details: Understanding your EMI helps in financial planning, assessing loan affordability, and comparing different loan options before making a hire purchase decision.

4. Using the Calculator

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

5. Frequently Asked Questions (FAQ)

Q1: What is hire purchase financing?
A: Hire purchase is a financing arrangement where the buyer pays for an asset in installments while using it, with ownership transferring after the final payment.

Q2: How does Public Bank calculate interest?
A: Public Bank typically uses reducing balance method where interest is calculated on the outstanding principal each month.

Q3: Are there other charges besides interest?
A: There may be processing fees, insurance, or other charges. Check with Public Bank for complete cost details.

Q4: Can I prepay my hire purchase loan?
A: Most banks allow prepayment but may charge a penalty. Check Public Bank's terms for specific conditions.

Q5: How accurate is this calculator?
A: This provides a close estimate, but actual EMI may vary slightly due to rounding or specific bank policies.