Questions people ask
How is EMI calculated?
Banks usually use the reducing-balance method: EMI = P × r × (1 + r)^n ÷ ((1 + r)^n − 1), where P is the loan amount, r is the monthly rate (yearly rate ÷ 12 ÷ 100) and n is the number of months.
Why is my bank’s EMI slightly different?
Banks may round each instalment, count days in a month differently, or add processing fees and insurance. Expect a small difference.
Does this include processing fees or tax on fees?
No. It shows the EMI on the loan amount only. Fees are usually paid separately at the start.
Should I reduce the EMI or the loan period after a part-payment?
Keeping the same EMI and shortening the loan saves more interest, because the balance falls faster. Lowering the EMI eases the monthly budget. The calculator shows both, with the interest saved; ask your bank which one it applies.
What happens to interest over time?
Early EMIs are mostly interest. As the balance falls, more of each EMI goes towards the loan itself. The repayment table shows this year by year.