Financial glossary
EMI
EMI, or equated monthly instalment, is a scheduled monthly loan payment containing principal and interest.
What EMI means
An equated monthly instalment is the amount scheduled for payment each month over a loan tenure. For a reducing-balance loan, the payment may remain level while the principal and interest portions change.
How EMI relates to a calculation
EMI depends mainly on the amount borrowed, the periodic interest rate, and the number of repayments. A higher principal or rate generally increases EMI; a longer tenure can lower EMI while increasing total interest.
Simple example
A ₹5,00,000 loan repaid over five years has 60 monthly instalments. The EMI calculation applies the monthly rate to the outstanding balance across those instalments.
What an EMI estimate may omit
Where this term is used
- EMI Calculator — Calculate monthly loan EMI, total interest payable, and total repayment amount for home, car, personal, or education loans.