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 SBI personal loans and credit cards, EMIs are used to repay both principal and interest each month.

2. How EMI Calculation Works

The calculator uses the standard EMI formula:

Where:

• \( P \) — Principal loan amount (Rs)
• \( R \) — Monthly interest rate (annual rate/12/100)
• \( N \) — Loan tenure in months

Explanation: The formula calculates the fixed monthly payment that would pay off the loan over its term with interest.

3. Understanding the Formula

Details: The formula accounts for compound interest over the loan tenure. The numerator calculates the compound interest factor, while the denominator adjusts for the repayment period.

4. Using the Calculator

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

5. Frequently Asked Questions (FAQ)

Q1: How does SBI calculate interest on personal loans?
A: SBI uses reducing balance method where interest is calculated on the outstanding principal each month.

Q2: What is the minimum tenure for SBI personal loans?
A: Typically 12 months, but may vary based on loan type and amount.

Q3: Are there prepayment charges on SBI personal loans?
A: SBI usually doesn't charge for prepayment of floating rate loans, but fixed rate loans may have charges.

Q4: Does the EMI include all charges?
A: EMI includes principal and interest. Processing fees and other charges are typically paid separately.

Q5: Can I change my EMI amount later?
A: Generally no, unless you opt for loan restructuring or tenure extension.