A maximum loan amount describes the total amount that a borrower is authorized to borrow. Maximum loan amounts are used in standard loans, credit cards and line of credit accounts.
An interest rate is the cost of borrowing money, or conversely, the income earned from lending money. Interest rates are expressed as percentage of the principal per period.
Period from the date of disbursement of loan to the date of the last EMI payment or the date of closure of loan.
Equated Monthly Installment – EMI for short – is the amount payable every month to the bank or any other financial institution until the loan amount is fully paid off. It consists of the interest on loan as well as part of the principal amount to be repaid. The sum of principal amount and interest is divided by the tenure, i.e., number of months, in which the loan has to be repaid.
Here’s the formula to calculate EMI:
where
E is EMI
P is Principal Loan Amount
r is rate of interest calculated on monthly basis.
n is loan term / tenure / duration in number of months