1. What is EMI Calculation?

EMI (Equated Monthly Installment) calculation determines the fixed monthly payment amount for a refinanced mortgage loan, including both principal and interest components.

2. How Does the Calculator Work?

The calculator uses the EMI formula:

Where:

• \( P \) — Principal loan amount (₹ or currency)
• \( r \) — Monthly interest rate (decimal)
• \( n \) — Loan term in months

Explanation: The formula calculates the fixed monthly payment required to pay off a loan over a specified term, accounting for both principal and interest.

3. Importance of EMI Calculation

Details: Accurate EMI calculation is crucial for financial planning, budgeting, and comparing different loan refinancing options to determine the most affordable monthly payment.

4. Using the Calculator

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

5. Frequently Asked Questions (FAQ)

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

Q2: Can EMI change during the loan term?
A: For fixed-rate loans, EMI remains constant. For floating-rate loans, EMI may change if interest rates fluctuate during the loan period.

Q3: How does refinancing affect EMI?
A: Refinancing can lower EMI by securing a lower interest rate or extending the loan term, though extending the term may increase total interest paid.

Q4: What is included in EMI payments?
A: EMI includes both principal repayment and interest components. Initially, interest constitutes a larger portion of the payment.

Q5: Are there any hidden charges in EMI?
A: EMI calculation typically includes only principal and interest. Additional charges like insurance, processing fees, or taxes are usually separate.