What does EMI mean? What is the full form of EMI?
The full form of EMI is Equated Monthly Installments.
If you have been looking for a loan(regardless of purpose), you may have come across the acronym EMI which stands for equated monthly installment. Equate Monthly Installment, is a more specific and technically correct way of talking about your monthly loan payments. A person’s EMI is typically a fixed payment made to the lender by the borrower on a monthly basis. So if a person had a mortgage and they made payments in a fixed amount each month, this could be considered and equated monthly installment.
Equated monthly installments will typically be split into two parts. First part of the payment will go towards paying down the principal. The other part of the payment will go toward paying the lender interest. Again, this is similar to a mortgage loan where payments are made with part of the payment going towards principal and interest with the goal of retiring the loan at the end of the amortization schedule.
This calculator will solve for the Equated Monthly Installment (EMI) of a loan using the following formula for EMI.
Where:
EMI = Equated Monthly Installment
PV = Loan Amount (Present Value)
i = monthly interest rate in decimal form
n = number of months of the loan
p.a. = per annum
Equated Monthly Installment or EMI loan is calculated like any other Car Loan or Mortgage Loan it just uses slightly different terminology.
- Loan Amount
- is the original principal on a new loan or principal outstanding if you are calculating a current loan
- Loan Tenure
- How long is the loan for? How long will you take to pay back the loan in years or months?
- Interest Rate
- is the annual nominal interest rate or stated rate on the loan
- Type
- In Advance means that the first payment is made at the beginning of the first period, on the same day you start the loan. In Arrears means that you start with your first payment 1 month after you start the loan.
EMI
means
Equated Monthly Installments
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