Simple Definition
EMI is the monthly amount a borrower pays to repay a loan. It usually includes both principal and interest components.
Why It Matters
EMI helps borrowers plan monthly cash flow and compare different loan amounts, tenures and interest rates.
Example
A longer tenure may reduce monthly EMI but can increase total interest paid over the loan period.
FAQs on EMI
What affects EMI?
Loan amount, interest rate and tenure are the main factors that affect EMI.
Can EMI change?
EMI may change for floating-rate loans or if the borrower prepays, restructures or changes tenure.