Fixed vs. Floating Interest Rates: How They Impact Your EMI Calculation
When securing a loan, whether for a business venture or purchasing a vehicle, understanding interest rates is crucial. Your choice between fixed and floating interest rates directly influences your Equated Monthly Installments (EMI) and overall repayment cost. Using an EMI calculator can help you compare these options effectively. Financial institutions like Ambit Finvest offer tailored loan solutions, ensuring affordability and ease in loan management. Understanding EMI and Its Calculation An Equated Monthly Installment (EMI) is a fixed amount paid monthly towards loan repayment. It consists of both principal and interest components. The calculation of EMI depends on several factors, including: Principal amount: The loan amount borrowed. Interest rate: Either fixed or floating, which determines the interest payable. Loan tenure: The duration over which the loan is repaid. Using an EMI calculator simplifies this process, helping borrowers determine the most suitable repay...