1. What is the EMI Formula?

The EMI (Equated Monthly Installment) formula calculates the fixed monthly payment amount for a loan, consisting of both principal and interest components. This formula is widely used for gold loan calculations at Indian Overseas Bank.

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 (years × 12)

Explanation: The formula distributes the loan repayment equally over the loan tenure, with the interest portion being higher initially and the principal portion increasing over time.

3. Importance of EMI Calculation

Details: Accurate EMI calculation helps borrowers plan their monthly budgets, understand the total cost of borrowing, and make informed decisions about loan affordability and tenure.

4. Using the Calculator

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

5. Frequently Asked Questions (FAQ)

Q1: What is the typical interest rate for Indian Overseas Bank gold loans?
A: Interest rates vary based on market conditions and loan amount, typically ranging from 7% to 15% per annum.

Q2: What is the maximum loan tenure for gold loans?
A: Indian Overseas Bank typically offers gold loans with tenure ranging from 6 months to 3 years, extendable up to 5 years in some cases.

Q3: How is the gold value assessed for loan purposes?
A: The bank assesses gold value based on current market price, purity of gold, and weight of the ornaments.

Q4: Are there any processing fees for gold loans?
A: Indian Overseas Bank may charge nominal processing fees, which are usually a small percentage of the loan amount.

Q5: Can I prepay my gold loan?
A: Yes, most gold loans allow prepayment, though prepayment charges may apply depending on the loan terms.