EMI stands for “Equated Monthly Installment,” which is a fixed amount of money that a borrower needs to repay to a lender every month, typically for a loan or debt repayment. The EMI includes both the principal amount borrowed and the interest charged on the loan, which is spread out over the loan’s tenure or repayment period.
The EMI amount is calculated based on various factors such as the loan amount, interest rate, loan tenure, and processing fees, among others. It helps borrowers to plan their budget and repay their loans in a structured manner over the loan’s tenure, making it easier for them to manage their finances. EMI is a common repayment method for various loans, including home loans, personal loans, car loans, and education loans.