Finance
What is An EMI?
An EMI, or equated monthly installment, is the fixed amount you pay every month to repay a loan — covering both the borrowed principal and the interest. It lets you buy something big now (a phone, a bike, a home) and spread the cost over months or years.
See it, don’t just read it.
Watch a 2-minute lesson with voice + animation that explains an emi.
Key things to understand
- 1A fixed monthly payment that repays a loan.
- 2Each EMI is part principal and part interest.
- 3It spreads a big purchase over time.
- 4Longer tenure means smaller EMIs but more total interest.
Frequently asked questions
- How is an EMI calculated?
- From the loan amount, the interest rate, and the tenure in months — a standard formula splits each payment into principal and interest.
- Is a longer EMI tenure better?
- It lowers the monthly amount but increases the total interest you pay, so the purchase costs more overall.
- What happens if I miss an EMI?
- You're charged a late fee, your credit score drops, and repeated misses can let the lender recover the asset.