Debt & Credit
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EMI (Equated Monthly Instalment)
💡 In plain English: The fixed monthly payment you make toward a loan — includes both principal repayment and interest.
Definition
A fixed monthly payment made by a borrower to a lender, consisting of principal repayment and interest, until the loan is fully paid.
📌 Real-World Example
₹30L home loan at 8.75% for 20 years → EMI = ₹26,536/month. Total payment = ₹63.7L (you pay ₹33.7L in interest on a ₹30L loan).
🔢 Formula
EMI = P × r × (1+r)^n / ((1+r)^n − 1)
Try it yourself
Use the EMI Calculator to see this concept with your own numbers.
Related Terms
APR (Annual Percentage Rate)
The true annual cost of borrowing money, including all fees — more...
Interest Rate
The price you pay to borrow money — expressed as a percentage per year.
Amortization
How a loan gets paid off over time — early EMIs are mostly...
Debt-to-Income Ratio (DTI)
The percentage of your monthly income that goes toward debt...
⚠️ Educational Content: All definitions and examples on this page are for educational and consultancy reference purposes only. They do not constitute financial, legal, or investment advice. Moneykar is not registered with SEBI, CBUAE, SCA, or any financial regulator. Consult a qualified professional before making financial decisions.