Overview
When you take a loan, the repayment is made through Equated Monthly Installments (EMIs) which include both principal and interest.
Types of Interest Rates
Fixed Interest Rate
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Interest rate remains constant throughout the loan tenure.
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EMI amount remains unchanged.
Floating Interest Rate
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Interest rate changes based on market conditions.
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EMI may increase or decrease over time.
How EMI is Calculated
The EMI depends on:
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Loan amount
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Interest rate
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Loan tenure
Banks generally provide EMI calculators on their websites to help customers estimate repayment amounts.
Example
Loan Amount: ₹5,00,000
Interest Rate: 11% per annum
Tenure: 5 years
Estimated EMI: Around ₹10,870 per month