Glossary › EMI
What is EMI (Equated Monthly Installment)?
A fixed monthly payment that repays a loan over its term, covering both interest and principal.
EMI is the equal amount you pay every month until a loan is fully repaid. Early EMIs are mostly interest; later ones are mostly principal. It's calculated with the reducing-balance formula P × r × (1+r)ⁿ ÷ ((1+r)ⁿ − 1). 'EMI' is the South Asian term; the US/UK call it the 'monthly payment'.
Example
A ₹50,00,000 home loan at 8.5% for 20 years has an EMI of about ₹43,391.