What is the full form of EMI
What is the full form of EMI
EMI: Equated Monthly Installment
EMI stands for Equated Monthly Installment. EMI is a fixed amount payable by a borrower to a moneylender at a specific date of each month for a specific period of time.
EMI consists of a principal amount and interest amount that a borrower is supposed to pay to lender over a specific number of years to pay off the loan in full. Therefore, it’s an unequal mix of the interest rate and principal.
EMI Calculation
The calculation of an EMI depends on below factors:
- Interest Rate: Rate of interest charged by the moneylender, e.g. Bank.
- Loan Amount (principal loan): The amount borrowed.
- Tenure of the Loan: The time provided by the lender to repay the entire loan including the interest.
- Monthly/annual Resting period