1. What is EMI Calculation with Prepayment?

EMI (Equated Monthly Installment) calculation with prepayment adjustment helps homeowners understand how making extra payments affects their monthly mortgage payments and overall loan tenure.

2. How Does the Calculator Work?

The calculator uses the standard EMI formula adjusted for prepayments:

Where:

• \( P \) — Adjusted principal amount after prepayment
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• \( n \) — Loan tenure in months

Explanation: Prepayments reduce the principal amount, which in turn reduces the monthly EMI or shortens the loan tenure.

3. Importance of EMI Calculation

Details: Accurate EMI calculation helps borrowers plan their finances, understand the impact of prepayments, and make informed decisions about mortgage management.

4. Using the Calculator

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

5. Frequently Asked Questions (FAQ)

Q1: How do prepayments affect my EMI?
A: Prepayments reduce your principal amount, which can either lower your monthly EMI or shorten your loan tenure, depending on your preference.

Q2: Should I reduce EMI or tenure with prepayments?
A: Reducing tenure saves more interest overall, while reducing EMI improves monthly cash flow. The choice depends on your financial goals.

Q3: Are there prepayment penalties?
A: Some lenders charge prepayment penalties. Check your loan agreement before making extra payments.

Q4: How often can I make prepayments?
A: This varies by lender. Some allow unlimited prepayments, while others have restrictions on frequency and amount.

Q5: Can prepayments be applied to future EMIs?
A: No, prepayments reduce the principal balance, not future EMI obligations. Your monthly payment amount or tenure will be recalculated.