1. What is EMI?

EMI (Equated Monthly Installment) is a fixed payment amount made by a borrower to a lender at a specified date each calendar month. EMIs are used to pay off both interest and principal each month, so that over a specified number of years, the loan is paid off in full.

2. How Does the EMI Calculator Work?

The calculator uses the EMI formula:

Where:

• \( P \) — Principal loan amount (INR)
• \( R \) — Monthly interest rate (annual rate ÷ 12 ÷ 100)
• \( N \) — Number of monthly installments (loan tenure in years × 12)

Explanation: The formula calculates the fixed monthly payment that includes both principal repayment and interest on the outstanding amount.

3. Importance of EMI Calculation

Details: Calculating EMI helps borrowers understand their monthly financial commitment, plan their budget effectively, and compare different loan offers to choose the most suitable option.

4. Using the Calculator

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

5. Frequently Asked Questions (FAQ)

Q1: What factors affect EMI amount?
A: EMI amount is affected by principal amount, interest rate, and loan tenure. Higher principal or interest rate increases EMI, while longer tenure reduces EMI.

Q2: Can EMI change during the loan period?
A: For fixed-rate loans, EMI remains constant. For floating-rate loans, EMI may change when interest rates change.

Q3: What is the typical car loan tenure?
A: Car loan tenures typically range from 1 to 7 years, depending on the lender and borrower's profile.

Q4: Are there any hidden charges in EMI?
A: EMI calculation typically includes only principal and interest. Additional charges like processing fees, insurance, or documentation fees are usually separate.

Q5: Can I prepay my car loan?
A: Most lenders allow prepayment, but may charge a prepayment penalty. Check with your specific lender for their prepayment policy.