Question 1

What does EMI mean in simple words?

Accepted Answer

EMI means Equated Monthly Instalment. It is the fixed amount you pay every month to repay a loan. This amount includes both the loan amount and the interest charged by the bank.

Question 2

What factors affect my EMI amount?

Accepted Answer

Your EMI depends on three main factors: loan amount, interest rate, and loan tenure. A higher loan or interest rate increases EMI, while a longer tenure usually lowers monthly payments.

Question 3

Is EMI the same for the entire loan period?

Accepted Answer

For loans with a fixed interest rate, EMI usually stays the same. For loans with a floating interest rate, EMI may change if the interest rate goes up or down during the loan period.

Question 4

What is an amortisation schedule?

Accepted Answer

An amortisation schedule shows how each EMI is split between interest and principal. In the early months, interest is higher. Over time, the principal portion increases as the loan balance reduces.

Question 5

Can I reduce my total interest by paying EMI faster?

Accepted Answer

Yes, choosing a shorter loan tenure or making extra payments can reduce the total interest payable. Faster repayment lowers overall borrowing cost.

Question 6

How does an EMI calculator help with loan planning?

Accepted Answer

An EMI calculator helps with financial planning by showing monthly payments in advance. It helps you check loan affordability, compare options, and plan a clear loan repayment plan before borrowing.

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