What is an EMI on a loan?

An EMI, or equated monthly instalment, is the fixed amount you pay on a loan every month.

Each payment covers some interest and repays some of the loan. Early payments are mostly interest. As the balance falls, more of each payment goes towards the loan itself. Paying extra early on can cut the total interest by a lot, if your lender allows it.

Example

A loan of 100,000 at 12% a year over 12 months has an EMI of about 8,885.

Loan calculator

General information only, not financial advice.