1. What is EMI Calculation?

EMI (Equated Monthly Installment) is a fixed payment amount made by a borrower to a lender at a specified date each calendar month. It is used to pay off both interest and principal each month, so that over a specified number of months, the loan is paid off in full.

2. How Does the Calculator Work?

The calculator uses the EMI formula:

Where:

• \( P \) — Principal loan amount (₹)
• \( r \) — Monthly interest rate (annual rate ÷ 12 ÷ 100)
• \( m \) — Loan term in months

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

3. Importance of EMI Calculation

Details: Accurate EMI calculation helps borrowers understand their monthly financial commitment, plan their budget effectively, and compare different loan offers from various lenders.

4. Using the Calculator

Tips: Enter the principal amount in ₹, 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 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: Can EMI change during loan tenure?
A: For fixed-rate loans, EMI remains constant. For floating-rate loans, EMI may change when interest rates change.

Q3: What is the typical car loan tenure in India?
A: Most car loans in India have tenure between 1-7 years (12-84 months).

Q4: Are there any hidden charges in car loans?
A: Besides interest, there may be processing fees, documentation charges, and prepayment penalties. Always read the loan agreement carefully.

Q5: Can I prepay my car loan?
A: Most lenders allow prepayment, but may charge a prepayment penalty, especially in fixed-rate loans. Check with your lender for specific terms.