1. What is EMI?

EMI (Equated Monthly Installment) is the fixed payment amount a borrower pays to a lender at a specified date each calendar month. It's commonly used for vehicle loans, home loans, and other installment-based financing.

2. How Does the Calculator Work?

The calculator uses the standard EMI formula:

Where:

• \( P \) — Loan principal amount (PHP)
• \( r \) — Monthly interest rate (annual rate divided by 12)
• \( n \) — Loan term in months

Explanation: The formula calculates the fixed monthly payment that will completely pay off the loan (principal + interest) over the specified term.

3. Understanding Loan Terms

Details: The loan amount (principal) is the total amount borrowed. The interest rate determines the cost of borrowing. The loan term affects both your monthly payment and total interest paid.

4. Using the Calculator

Tips: Enter the loan amount in PHP, annual interest rate as a percentage (e.g., 5.5 for 5.5%), and loan term in months. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What affects my EMI amount?
A: Three main factors - loan amount (higher amount = higher EMI), interest rate (higher rate = higher EMI), and loan term (longer term = lower EMI but more total interest).

Q2: How can I reduce my EMI payments?
A: You can either negotiate a lower interest rate, borrow less money, or extend your loan term (though this increases total interest paid).

Q3: Is a down payment recommended?
A: Yes, a larger down payment reduces your loan amount and subsequent EMI payments, and may qualify you for better interest rates.

Q4: Are there other charges besides EMI?
A: Some loans may have processing fees, insurance premiums, or other charges that aren't included in the EMI calculation.

Q5: What's better - shorter or longer loan term?
A: Shorter terms mean higher EMIs but less total interest. Longer terms have lower EMIs but cost more overall. Choose based on your monthly budget.