Equated Monthly Instalment (EMI)
The fixed monthly payment to repay a loan.
Definition
An Equated Monthly Instalment (EMI) is the fixed amount you pay a lender every month to repay a loan — comprising both principal and interest — over the loan tenure. Early EMIs are interest-heavy; later ones repay more principal.
Formula
EMI = P × r × (1 + r)^n / ((1 + r)^n − 1) — P = principal, r = monthly rate, n = months Example
A ₹20 lakh home loan at 8.5% for 20 years has an EMI of about ₹17,356.
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