Question 1

What is an EMI?

Accepted Answer

EMI stands for Equated Monthly Installment. It is the fixed monthly amount you pay to a lender to repay a loan over a specified tenure. Each EMI covers a portion of the principal and the interest.

Question 2

How is EMI calculated?

Accepted Answer

EMI = [P × r × (1 + r)^n] / [(1 + r)^n – 1], where P is the loan principal, r is the monthly interest rate (annual rate ÷ 12 ÷ 100), and n is the number of monthly installments.

Question 3

Does a higher down payment reduce EMI?

Accepted Answer

Yes. A larger down payment reduces the loan principal (P), which directly reduces your EMI and the total interest paid over the loan tenure.

Question 4

What happens if I prepay part of my loan?

Accepted Answer

Prepayment reduces the outstanding principal, which lowers your future interest burden. You can either reduce your EMI amount or shorten the loan tenure, depending on your lender's terms.

Question 5

Which loan type has the lowest EMI?

Accepted Answer

Home loans typically have the longest tenure (up to 30 years) and lower interest rates, resulting in lower EMIs for the same principal. Personal loans have higher rates and shorter tenures, giving higher EMIs.

Question 6

Can I change the tenure to reduce my EMI?

Accepted Answer

Yes. Extending the loan tenure reduces the monthly EMI but increases the total interest paid over the loan life. Use our calculator to find the right balance.

Month	Principal	Interest	Balance
1	₹4,785	₹21,250	₹29,95,215
2	₹4,819	₹21,216	₹29,90,397
3	₹4,853	₹21,182	₹29,85,544
4	₹4,887	₹21,148	₹29,80,657
5	₹4,922	₹21,113	₹29,75,735
6	₹4,957	₹21,078	₹29,70,779
7	₹4,992	₹21,043	₹29,65,787
8	₹5,027	₹21,008	₹29,60,760
9	₹5,063	₹20,972	₹29,55,697
10	₹5,099	₹20,936	₹29,50,599
11	₹5,135	₹20,900	₹29,45,464
12	₹5,171	₹20,864	₹29,40,293

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