1. What is the EMI Formula?

The EMI (Equated Monthly Installment) formula calculates the fixed monthly payment amount for a loan, including both principal and interest components. It's widely used for gold loans and other types of installment loans.

2. How Does the Calculator Work?

The calculator uses the standard EMI formula:

Where:

• \( P \) — Principal loan amount (INR)
• \( R \) — Monthly interest rate (annual rate ÷ 12 ÷ 100)
• \( N \) — Number of monthly installments
• \( EMI \) — Equated Monthly Installment (INR)

Explanation: The formula distributes the loan repayment equally over the loan tenure, with interest calculated on the reducing balance.

3. Importance of EMI Calculation

Details: Accurate EMI calculation helps borrowers plan their finances, understand the total cost of borrowing, and compare different loan offers from Indian Bank and other lenders.

4. Using the Calculator

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

5. Frequently Asked Questions (FAQ)

Q1: What is the typical interest rate for Indian Bank gold loans?
A: Interest rates vary but typically range from 7% to 15% per annum depending on the loan amount and tenure.

Q2: What is the maximum tenure for gold loans?
A: Most banks offer gold loans with tenure ranging from 3 months to 3 years, with some extending up to 5 years.

Q3: Are there any processing fees for gold loans?
A: Indian Bank may charge nominal processing fees, typically 0.5% to 1% of the loan amount plus GST.

Q4: What is the loan-to-value ratio for gold loans?
A: RBI guidelines allow up to 75% loan-to-value ratio for gold loans, meaning you can borrow up to 75% of your gold's value.

Q5: Can I prepay my gold loan?
A: Most banks allow prepayment, but may charge prepayment penalties if done within a certain period. Check Indian Bank's specific terms.