Loan Calculator With Part Payment

Loan EMI Formula:

\[ PMT = P \times \frac{r \times (1 + r)^n}{(1 + r)^n - 1} \]

Principal Amount (P):

USD

Annual Interest Rate:

Loan Term:

years

Part Payment (Optional):

USD

Part Payment Type:

Monthly Payment (EMI):

Loan Term:

Total Interest:

Total Payment:

Unit Converter ▲

Unit Converter ▼

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1. What is Loan EMI Calculation?

The EMI (Equated Monthly Installment) calculation determines the fixed payment amount a borrower makes each month to repay a loan. It includes both principal and interest components, with the interest portion higher at the beginning of the loan term.

2. How Does the Calculator Work?

The calculator uses the standard EMI formula:

\[ PMT = P \times \frac{r \times (1 + r)^n}{(1 + r)^n - 1} \]

Where:

\( P \) — Principal loan amount (USD)
\( r \) — Monthly interest rate (annual rate divided by 12)
\( n \) — Loan term in months
\( PMT \) — Monthly payment (EMI)

Part Payment Handling: Additional payments can either reduce the EMI amount (keeping same term) or reduce the loan term (keeping same EMI).

3. Importance of Part Payments

Details: Making part payments can significantly reduce total interest paid over the life of the loan. Even small additional payments can have a large impact when applied early in the loan term.

4. Using the Calculator

Tips: Enter principal amount in USD, annual interest rate in percentage, and loan term in years. Optionally add a part payment amount and choose whether it should reduce your EMI or loan term.

5. Frequently Asked Questions (FAQ)

Q1: Should I choose to reduce EMI or tenure with part payments?
A: Reducing tenure saves more interest overall, while reducing EMI improves monthly cash flow. Choose based on your financial priorities.

Q2: How often can I make part payments?
A: This depends on your loan terms. Some lenders allow unlimited part payments, while others may charge fees or have restrictions.

Q3: Are part payments applied immediately?
A: Typically yes, but check with your lender. The principal reduction should take effect from the next billing cycle.

Q4: Does this calculator account for loan fees?
A: No, it calculates based on principal amount only. For precise calculations, include any origination fees in the principal amount.

Q5: Why does my actual loan have slightly different numbers?
A: Lenders may use different rounding methods or have small variations in how they apply payments. This calculator provides estimates.