What is EMI? Why EMI?

It is a fixed payment amount mutually agreed by the lender and the borrower, which the borrower agrees to pay the lender on a specified date each calendar month. EMI stands for Equated monthly installments are used to pay off both interest and principal each month, so that over a specified number of years, the loan is paid off in full. The first few months, the EMI would have higher interest amount than the principal amount which will gradually be the opposite as the loan repayments happen.

The benefit of an EMI for borrowers is that they know precisely how much money they will need to pay toward their loan each month and on which date, making the personal budgeting process easier. The borrowers can choose from a list of varied repayment options. Loan track record is easily available online or with the banks which can provide you details on how many EMI’s the Loan consists of , Principal taken, Principal paid, Rate of interest paid so far , how many EMI’s paid ,how many EMI’s pending ? etc,.