Full Form of EMI is Equated Monthly Instalment. It is the fixed amount that is paid by the borrower on monthly basis on his loan. EMI includes interest as well as principal and it is paid each month. When you take loan from Bank, bank asks you how much EMI you are willing to pay and depending on EMI chosen by you the duration of your loan varies.
Lets say you take loan of Rs1 lakh from bank at the rate of 12% interest. You say that you will pay Rs25,000 per month till your loan is clear. So, in this case Rs25,000 is your EMI which is the fixed amount paid by you each month till the loan is cleared. Bank in agreement with you decides the date on which you are supposed to pay your EMI every month.
Benefit of EMI is that you know each month how much you are supposed to pay and by which date and thus it helps you plan your personal budget easily.
Frequently asked questions about EMI answered above:
What is full form of EMI?
What is EMI?
Who pays EMI?
What does EMI include?
Example of EMI
Benefits of EMI
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