What does an EMI comprise of?

Both principal and interest amounts

What factors influence the calculation of EMI?

Interest rate, principal amount, and loan tenure

EMI Full Form

by Yogi P - August 20, 2023

What is the Full form of EMI?

EMI Full form is Equated Monthly Instalment (EMI). EMI refers to a fixed sum that a borrower pays to a lender on a specified date each month for a predetermined period. It encompasses both the principal amount and interest, facilitating gradual repayment of a loan over a set number of years. As such, EMI is a combination of varying interest and principal components.

Factors Influencing EMI: The calculation of EMI depends on several key factors, including:

Interest rate
Borrowed principal amount
Annual or monthly resting period
Loan tenure

The principal amount represents the sum borrowed from the lender, also known as the loan amount. Loan tenure refers to the duration during which the borrower repays the loan amount along with interest. Lenders, such as banks, apply an interest rate to determine the EMI.

Benefits of EMI: EMI offers several advantages, enabling individuals to make purchases beyond their immediate financial capacity by allowing them to spread payments over instalments. Other benefits include:

Direct Payment: EMI allows direct payment from individuals to lenders, eliminating the need for intermediaries.
Financial Flexibility: It provides individuals with the flexibility to manage their expenses while making substantial purchases.
Structured Repayment: EMI offers a structured approach to loan repayment, making it more manageable for borrowers.

Source: Official website of ICICI Bank at https://www.icicibank.com/blogs/home-loan/what-is-emi-and-how-is-it-calculated

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How to use our EMI Calculator

Move the sliders to select your loan amount, the interest, and for how many years you'll be paying it back.

Once you've set those, our Loan EMI Calculator will quickly show you the monthly EMI amount you'll need to pay.

Our Loan EMI Calculator is super easy to use! In no time, you'll see your monthly EMI payment, the interest cost, and the total you'll end up paying for your loan.