Full Form of EMI
Equated Monthly Installment
EMI Full Form is Equated Monthly Installment. It is an amount repaid by the borrower to the lender along with the agreed interest. EMI applies to various loans like home loan, gold loan, car loan, personal loan and more. The general calculation of EMI is derived through adding the principle amount and interest and dividing it with the number of months in the period the borrower agrees to pay the full amount. To simply put, EMI is the installment payment of the loan to the lender.
The benefit that a borrower enjoys through EMIs is that he or she exactly knows how much amount is to be paid each month, which makes budget planning much simpler. In an EMI calculation, the two variables comprise of principle and interest. During the initial years the interest would be higher as the amount overdue is higher. And the interest eventually decreases as years pass by and the principle amount gradually reduces.