1. What is EMI Calculation?

EMI (Equated Monthly Installment) is the fixed amount you pay to the bank each month to repay your personal loan. It consists of both principal and interest components, with the interest portion being higher in the initial months.

2. How Does the EMI Calculator Work?

The calculator uses the standard EMI formula:

Where:

• \( P \) — Principal loan amount (INR)
• \( R \) — Monthly interest rate (annual rate ÷ 12 ÷ 100)
• \( N \) — Loan tenure in months
• \( EMI \) — Equated Monthly Installment (INR)

Explanation: The formula calculates the fixed monthly payment required to completely repay the loan over the specified tenure, accounting for compound interest.

3. Importance of EMI Calculation

Details: Accurate EMI calculation helps borrowers plan their finances, understand the total cost of borrowing, and choose the right loan tenure that fits their budget.

4. Using the Calculator

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

5. Frequently Asked Questions (FAQ)

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

Q2: Can I prepay my personal loan?
A: Most Indian banks allow prepayment, but may charge a prepayment penalty. Check with your specific bank for their prepayment policies.

Q3: How does interest calculation work?
A: Indian banks typically use reducing balance method, where interest is calculated on the outstanding principal each month.

Q4: What are typical interest rates for personal loans?
A: Personal loan interest rates in India typically range from 10% to 24% per annum, depending on credit score, income, and bank policies.

Q5: Are there any hidden charges?
A: Besides interest, banks may charge processing fees, documentation charges, and prepayment penalties. Always read the loan agreement carefully.