An equated monthly instalment, or EMI, is the fixed amount you repay each month on a loan. It combines interest and principal, and understanding how it is built helps you plan a repayment you can sustain.
What drives the EMI
Three inputs determine the EMI: the loan amount, the interest rate, and the tenure. A larger loan or a higher rate raises the EMI; a longer tenure lowers the monthly figure but increases the total interest paid over the life of the loan.
Interest and principal over time
In the early years, a larger share of each EMI goes toward interest. As the balance falls, more of each payment reduces the principal. This is why prepaying early in the tenure saves more interest than prepaying late.
Fixed versus floating rate
A fixed rate keeps the EMI steady. A floating rate moves with a benchmark, so the EMI or the tenure can change at reset dates. Estimate at a realistic rate rather than the headline one, and leave room for a rate rise.
Plan with a margin
Confirm the EMI fits comfortably within your income after existing commitments. Our EMI calculator works out the figure for you and keeps your inputs on the page; none of them are placed in the URL.
The right EMI is one you can carry without strain through a change in income or interest rates, not simply the largest a lender will approve.