Interest Rate Calculator Bangladesh

EMI Formula:

\[ EMI = \frac{P \times R \times (1 + R)^N}{(1 + R)^N - 1} \]

Monthly EMI Payment:

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1. What is the EMI Calculator?

The EMI (Equated Monthly Installment) Calculator helps you calculate your monthly loan payments in Bangladesh. It uses the standard EMI formula to determine how much you need to pay each month towards your loan.

2. How Does the Calculator Work?

The calculator uses the EMI formula:

\[ EMI = \frac{P \times R \times (1 + R)^N}{(1 + R)^N - 1} \]

Where:

\( P \) — Principal loan amount (BDT)
\( R \) — Monthly interest rate (annual rate ÷ 12 ÷ 100)
\( N \) — Number of monthly installments (loan term in years × 12)
\( EMI \) — Equated Monthly Installment (BDT)

Explanation: The formula calculates the fixed monthly payment that includes both principal and interest components over the loan term.

3. Importance of EMI Calculation

Details: Calculating EMI helps borrowers understand their monthly financial commitment, plan their budget effectively, and compare different loan offers from Bangladeshi banks and financial institutions.

4. Using the Calculator

Tips: Enter the principal amount in BDT, annual interest rate in percentage, and loan term in years. All values must be positive numbers with principal > 0 and loan term ≥ 1 year.

5. Frequently Asked Questions (FAQ)

Q1: What is EMI?
A: EMI stands for Equated Monthly Installment - the fixed amount you pay each month towards your loan repayment, which includes both principal and interest components.

Q2: How is interest calculated in Bangladesh?
A: Most banks in Bangladesh use reducing balance method where interest is calculated on the outstanding principal amount each month.

Q3: Can I prepay my loan in Bangladesh?
A: Yes, most banks in Bangladesh allow prepayment, but some may charge a prepayment penalty. Check with your specific bank for their policies.

Q4: What factors affect my EMI?
A: EMI is affected by three main factors: loan amount, interest rate, and loan tenure. Higher loan amounts or interest rates increase EMI, while longer tenures reduce EMI.

Q5: Are there any hidden charges in EMI calculation?
A: This calculator shows the basic EMI. Actual loans may include processing fees, insurance, and other charges that are not included in this calculation.