Get an instant, accurate calculation of your Equated Monthly Installment (EMI) for any loan in Bangladesh. See how prepayment can help you save thousands in interest and shorten your loan term.
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An Equated Monthly Installment (EMI) is the fixed payment you make to a lender each month to repay a loan. It includes both the principal amount and the interest charged, ensuring the loan is fully paid off over the agreed tenure.
To demonstrate our expertise, here is the mathematical formula used for calculating EMI:
EMI = [P x R x (1+R)N] / [(1+R)N-1]
The key to saving thousands on your loan is to reduce the principal amount as quickly as possible. Here’s how:
A fixed interest rate remains constant throughout the loan tenure, making your EMI predictable. A floating interest rate is linked to market benchmarks like the SMART rate by Bangladesh Bank and can change over time, causing your EMI to fluctuate.
When you make a prepayment, the amount is deducted directly from your outstanding principal. Lenders typically give you two options: either reduce your monthly EMI for the remaining tenure or keep the EMI the same and reduce your loan tenure. Reducing the tenure is almost always the better option for saving on total interest.
An amortization schedule is a complete table of periodic loan payments, showing the amount of principal and interest that comprise each payment until the loan is paid off at the end of its term. Our tool generates a full schedule for you to review and download.