1. What is EMI?

EMI (Equated Monthly Installment) is the fixed payment amount a borrower makes to a lender each month for a specified number of months to repay a loan. It includes both principal and interest components.

2. How Does the Calculator Work?

The calculator uses the standard EMI formula:

Where:

• \( P \) — Loan principal amount (₱)
• \( r \) — Monthly interest rate (annual rate ÷ 12 ÷ 100)
• \( n \) — Loan term in months

Explanation: The formula calculates the fixed monthly payment that would completely pay off the loan over its term, accounting for compound interest.

3. Importance of EMI Calculation

Details: Understanding your EMI helps in financial planning, ensuring the loan payments fit within your monthly budget and comparing different loan offers.

4. Using the Calculator

Tips: Enter loan amount in pesos, annual interest rate in percentage, and loan term in months (1-60 months). All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What is a typical interest rate for salary loans in the Philippines?
A: Rates typically range from 5% to 24% annually depending on the lender, loan amount, and borrower's credit profile.

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

Q3: Are there other charges besides interest?
A: Some lenders charge processing fees, service fees, or insurance. These are not included in this calculation.

Q4: Can I prepay my loan?
A: Most lenders allow prepayment but may charge a fee. Prepayment reduces total interest paid.

Q5: What if I miss an EMI payment?
A: Late payments incur penalties and may affect your credit score. Always prioritize EMI payments.