UNDERSTANDING EMI
How is EMI
calculated?
EMI (Equated Monthly Instalment) is the fixed monthly amount you repay towards your loan, combining both principal and interest. Early in the tenure, a larger share of the EMI goes towards interest; as the loan progresses, more of it goes towards the principal.
The exact EMI depends on three factors — the loan amount, the interest rate offered by your lender, and the repayment tenure you choose. Use the calculator above to see how changing any of these affects your monthly outgo.
TIPS
Ways to manage
your EMI better.
- ✓Choose a comfortable tenureA longer tenure lowers EMI but increases total interest paid over time.
- ✓Consider part-prepaymentsWhere permitted, periodic part-payments can reduce your overall interest burden.
- ✓Compare offersRates and fees vary by lender — it helps to compare before finalising.
- ✓Track your obligationsKeep your overall EMI-to-income ratio in mind before taking on new loans.