What is EMI?

Equated Monthly Installment (EMI) is a fixed payment amount made by a borrower to a lender at a specified date each calendar month. EMIs are used to pay off both interest and principal each month so that over a specified number of years, the loan is paid off in full.

EMI Formula

EMI = [P x R x (1+R)^N]/[(1+R)^N-1], where P is the loan amount, R is the interest rate per month, and N is the number of monthly installments.