1. What is the EMI Loan Calculator?

The EMI Loan Calculator estimates the eligible loan amount for Bangladesh loans based on monthly salary, EMI-to-income ratio, interest rate, and loan tenure. It helps individuals determine how much they can borrow while maintaining affordable monthly payments.

2. How Does the Calculator Work?

The calculator uses the formula:

Where:

• \( S \) — Monthly salary (BDT)
• \( M \) — EMI-to-income ratio (decimal)
• \( R \) — Monthly interest rate (decimal)
• \( N \) — Number of monthly payments
• \( P \) — Principal loan amount (BDT)

Explanation: The formula calculates the maximum loan amount you can afford based on your monthly income and the portion of income allocated for EMI payments.

3. Importance of Loan Calculation

Details: Proper loan calculation helps borrowers avoid over-leveraging, ensures affordable monthly payments, and maintains financial stability throughout the loan tenure.

4. Using the Calculator

Tips: Enter monthly salary in BDT, EMI-to-income ratio as decimal (e.g., 0.4 for 40%), monthly interest rate as decimal, and number of monthly payments. All values must be positive.

5. Frequently Asked Questions (FAQ)

Q1: What is a typical EMI-to-income ratio in Bangladesh?
A: Most lenders recommend keeping EMI payments below 40-50% of monthly income to maintain financial stability.

Q2: How is monthly interest rate calculated from annual rate?
A: Monthly rate = Annual rate / 12. For example, 12% annual rate = 1% monthly rate (0.01 as decimal).

Q3: What factors affect eligible loan amount?
A: Salary amount, EMI-to-income ratio, interest rate, and loan tenure are the primary factors that determine eligible loan amount.

Q4: Are there other charges besides EMI?
A: Yes, loans may include processing fees, insurance, and other charges that should be considered in overall affordability.

Q5: Should I borrow the maximum eligible amount?
A: It's generally advisable to borrow only what you need and can comfortably repay, not necessarily the maximum eligible amount.