1. What is Home Loan EMI?

EMI (Equated Monthly Installment) is the fixed payment amount a borrower makes to a lender at a specified date each calendar month. It includes both principal and interest components, calculated to pay off the loan over the specified term.

2. How Does the Calculator Work?

The calculator uses the standard EMI formula with part payment adjustment:

Where:

• \( P \) — Loan principal amount
• \( r \) — Monthly interest rate (annual rate ÷ 12)
• \( n \) — Loan term in months
• part payment adjustment — Part payment amount divided by loan term

Explanation: The formula calculates the fixed monthly payment needed to completely repay the loan over its term, then adjusts for any part payment made.

3. Importance of Part Payment

Details: Making part payments reduces your principal amount, which in turn reduces both your EMI burden and the total interest paid over the loan term.

4. Using the Calculator

Tips: Enter loan amount in dollars, annual interest rate in percentage, loan term in years, and any planned part payment amount. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: How does part payment affect my loan?
A: Part payments reduce your principal, which decreases both your EMI and total interest paid over the loan term.

Q2: Should I reduce EMI or loan tenure with part payment?
A: Reducing tenure saves more interest, while reducing EMI improves monthly cash flow. Choose based on your financial priorities.

Q3: Are there prepayment penalties?
A: Some lenders charge prepayment penalties, especially in fixed-rate loans. Check your loan terms before making part payments.

Q4: How often can I make part payments?
A: This depends on your loan terms. Some allow unlimited part payments, while others restrict frequency or amount.

Q5: Is it better to make part payments early or late in the loan term?
A: Early part payments save more interest since interest is front-loaded in amortizing loans.