Question 1

How is Loan EMI calculated?

Accepted Answer

EMI is calculated using the standard mathematical reducing-balance formula: EMI = [P x R x (1+R)^N] / [(1+R)^N - 1], where P is Principal Loan Amount, R is Monthly Interest Rate (Annual Rate / 12 / 100), and N is Loan Tenure in months.

Question 2

What is a Step-up EMI and how does it save interest?

Accepted Answer

A Step-up EMI allows you to increase your monthly installment by a set percentage every year as your income grows. By increasing your EMI annually, you pay off the principal much faster, significantly reducing loan tenure and saving lakhs of rupees in cumulative interest.

Question 3

How does the SIP Calculator work and what formula does it use?

Accepted Answer

The SIP (Systematic Investment Plan) calculator computes the future value of monthly mutual fund investments using the compound interest formula: FV = P × [((1 + i)^n - 1) / i] × (1 + i), where P is monthly investment, i is monthly return rate, and n is total number of monthly payments.

Question 4

Which is better: New Tax Regime or Old Tax Regime for FY 2026-27?

Accepted Answer

Under the New Tax Regime (FY 2026-27), taxpayers receive a ₹75,000 standard deduction and pay zero tax on net taxable income up to ₹7,00,000 under Section 87A rebate. The Old Tax Regime is only advantageous if your combined eligible deductions (Section 80C ₹1.5L, Section 80D health insurance, Section 24b home loan interest ₹2L, and HRA exemption) exceed approximately ₹3.75 Lakh to ₹4.25 Lakh per year.

Question 5

What is the difference between Flat Interest Rate and Reducing Balance Rate?

Accepted Answer

In a reducing balance loan, interest is charged only on the outstanding principal balance each month as you pay off the loan. In a flat rate loan, interest is calculated on the entire initial principal throughout the tenure, making flat rates significantly more expensive.

Question 6

Can I download the loan repayment schedule?

Accepted Answer

Yes, SK EMI Calculator allows you to download your full year-by-year and month-by-month loan amortization schedule in high-resolution PDF and Excel CSV spreadsheet formats completely free.