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COMPARE LOANSEMI (Equated Monthly Installment) is the fixed amount you pay every month towards a loan until it's fully repaid. Every EMI has two parts โ interest and principal. In the early months, most of your EMI goes towards interest; as the loan progresses, more goes towards the principal. This is why total interest looks large on long-tenure loans โ interest is charged on the outstanding balance, so a 20-year home loan accumulates far more interest than a 3-year personal loan of the same amount.
The formula banks use is: EMI = P ร r ร (1+r)n / ((1+r)n โ 1), where P is the loan amount, r is the monthly interest rate (annual rate รท 12 รท 100), and n is the tenure in months. This calculator applies that exact formula, so the number above matches what your bank would quote.
A longer tenure lowers your monthly EMI but increases total interest paid. A shorter tenure raises the EMI but reduces total interest. If you can comfortably afford a higher EMI, a shorter tenure usually saves a significant amount overall.
Yes, for a fixed-rate loan the EMI stays constant every month. What changes internally is the split between interest and principal โ early EMIs are interest-heavy, later ones are principal-heavy. Floating-rate loans may see the EMI or tenure revised when the rate changes.
Most banks suggest keeping total EMIs under 40-50% of your monthly take-home income. Going beyond that makes it harder to handle emergencies or save for other goals.
Yes โ prepaying part of the principal (reduces EMI or tenure) or refinancing to a lower rate with another bank are the two common ways. Use the Loan Prepayment Savings calculator on KiTools to see exact savings.
No โ this is the pure EMI based on principal, rate and tenure only. Banks often add a one-time processing fee (0.5-2%) and may bundle insurance. Check the loan's Key Fact Statement for the full cost.