1. What is the EMI Calculation Formula?

The EMI (Equated Monthly Installment) formula calculates the fixed payment amount a borrower makes to a lender each month. This formula is commonly used for home loans, personal loans, and other installment loans.

2. How Does the Calculator Work?

The calculator uses the standard EMI formula:

Where:

• \( P \) — Principal loan amount (INR)
• \( r \) — Monthly interest rate (annual rate divided by 12 and converted to decimal)
• \( n \) — Loan tenure in months
• \( PMT \) — Monthly EMI payment (INR)

Explanation: The formula accounts for both principal repayment and interest payment components in each EMI.

3. Importance of EMI Calculation

Details: Understanding your EMI helps in financial planning, comparing loan offers, and determining affordability before taking a loan.

4. Using the Calculator

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

5. Frequently Asked Questions (FAQ)

Q1: What is included in an EMI payment?
A: Each EMI includes both principal repayment and interest payment for that month.

Q2: How does loan tenure affect EMI?
A: Longer tenures reduce EMI but increase total interest paid. Shorter tenures increase EMI but reduce total interest.

Q3: What factors can change my EMI amount?
A: EMI can change if interest rates change (for floating rate loans) or if you make prepayments.

Q4: Is this calculator specific to Bajaj Finance?
A: While it uses standard EMI calculation, actual Bajaj Finance loans may have additional fees or charges.

Q5: Can I reduce my EMI amount?
A: You can reduce EMI by extending loan tenure, negotiating a lower interest rate, or making a larger down payment.