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 by BDO and other financial institutions for loan repayment calculations.

2. How Does the Calculator Work?

The calculator uses the standard EMI formula:

Where:

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

Explanation: The formula calculates the fixed monthly payment that pays off the loan principal plus interest over the specified term.

3. Importance of EMI Calculation

Details: Accurate EMI calculation helps borrowers understand their repayment obligations, plan their finances, and compare different loan offers from BDO and other lenders.

4. Using the Calculator

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

5. Frequently Asked Questions (FAQ)

Q1: What factors affect my EMI amount?
A: EMI is determined by three main factors: loan amount, interest rate, and loan tenure. Higher amounts or rates increase EMI, while longer tenures reduce it.

Q2: Can I reduce my EMI payments?
A: Yes, by opting for a longer loan tenure or negotiating a lower interest rate with BDO, though longer tenure may increase total interest paid.

Q3: Are there any hidden charges in EMI calculations?
A: This calculator shows the principal and interest components. Actual BDO loans may include processing fees, insurance, or other charges not reflected here.

Q4: How often can I change my EMI amount?
A: EMI amounts are typically fixed for the loan term, but BDO may offer restructuring options or prepayment facilities that could affect payments.

Q5: What happens if I miss an EMI payment?
A: Late payments may incur penalties, affect your credit score, and could lead to additional interest charges from BDO.