EMI (Equated Monthly Instalment)
Also known as: equated monthly instalment, loan instalment
An EMI is the fixed monthly payment a borrower makes to repay a loan's principal and interest over its term.
An Equated Monthly Instalment (EMI) is the constant amount you pay each month on a home or construction loan. Each EMI covers part interest and part principal; early instalments are mostly interest, while later ones repay more principal.
The EMI depends on the loan amount, the interest rate, and the tenure. A longer tenure lowers the monthly EMI but increases the total interest paid over the life of the loan.
Lenders also check that your EMIs stay within a share of your income (the FOIR) when deciding how much you can borrow.