1. What is EMI Calculation?

EMI (Equated Monthly Installment) calculation helps determine the fixed monthly payment amount for a personal loan in Bangladesh. It includes both principal and interest components.

2. How Does the Calculator Work?

The calculator uses the EMI formula:

Where:

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

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

3. Importance of EMI Calculation

Details: Accurate EMI calculation helps borrowers plan their finances, compare loan offers, and understand the total cost of borrowing before committing to a loan.

4. Using the Calculator

Tips: Enter principal amount in BDT, annual interest rate in percentage, and loan term in months. All values must be valid (amount > 0, interest rate > 0, term ≥ 1).

5. Frequently Asked Questions (FAQ)

Q1: What factors affect EMI amount?
A: EMI amount is affected by principal amount, interest rate, and loan tenure. Higher principal or interest rate increases EMI, while longer tenure reduces EMI.

Q2: Are there any additional charges in EMI?
A: This calculator shows only principal and interest. Actual EMI may include processing fees, insurance, or other charges depending on the lender.

Q3: Can I prepay my loan?
A: Most Bangladeshi banks allow prepayment, often with some prepayment charges. Prepayment reduces total interest paid.

Q4: What is the typical loan tenure in Bangladesh?
A: Personal loans typically range from 12-60 months, though some lenders may offer longer terms for specific loan types.

Q5: How does interest rate affect total payment?
A: Higher interest rates significantly increase the total amount repaid over the loan tenure, making it important to compare rates from different lenders.