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Nepal Rastra Bank (NRB) Directives
How is bank EMI calculated in Nepal?
Direct Answer: EMI is calculated using standard reducing balance compounding formula: EMI = [P x R x (1+R)^N] / [(1+R)^N-1], where P is Principal, R is monthly interest rate, and N is the number of months.
NRB Base Rate Guidelines50% DSTI Eligibility LimitReducing Balance Method
Loan EMI & Banking FAQs
EMI is calculated using standard reducing balance compounding formula: EMI = [P x R x (1+R)^N] / [(1+R)^N-1], where P is Principal, R is monthly interest rate, and N is the number of months.
Yes, making partial prepayments directly reduces your principal loan balance, which dramatically cuts down total interest paid over the remaining tenure of the loan.