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What is EMI and How It Works [Complete Guide]

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What is EMI and  How EMI Works? Today we will tell you a very important information in this post. This information will prove to be very beneficial for you and you may have been trying for several days about this Information but some information you may not have received. If you have not got sufficient information then don’t worry, today we will tell you in this post What is EMI.

Because you have also taken any type of loan ie. Home loan, Personal loan, Business loan, Education loan or any other loan from bank or credit card. Or you might even have thought of taking a loan. Or anyone in your family would have thought about it, at that time it is very important to know about the estimation of EMI.

Because when you take a loan from a bank. The bank withdraws its money only by the EMI and nowadays online shopping companies are also offering EMI option, Like Amazon, Flipkart. you can also buy any kind of goods with EMI, but you can also pay it through EMI.

So today we will tell you what is EMI and how it works? So you read this information thoroughly and carefully. Because whenever you take a loan from the bank, you will not have any problem and get complete information about your EMI.

What is EMI

At first, we tell you, What is EMI? The full form of EMI is Equated Monthly Installment.If you use monthly installments to repay any kind of loan that is called EMI. The amount of loan you take, the total amount of that is called the Principal and the additional amount is given above is called Interest. And all of that, you all will know what the Principal and Interest are?

In today’s time, almost all people give more importance to the loan. Because you do not have any other problem with taking a loan like you borrow money from someone (your relative or friend). If you borrow money from your friend or relative, you may face problem in nearby future. But if you take the loan from the bank you may not.

Because you get full money from the bank in one go as Loan. And you have to repay the loan in Installment ie. you do not have to pay all the money together. Therefore, the bank gives you the option of paying a monthly installment (EMI) to avoid any kind of problem. Under which you can easily repay your entire loan money in installments.

And when you take money from someone else. You have to pay even more interest. And that person will take the entire money from you together. And you do not have the option of any kind of monthly installment.

That if you take the loan from any kind of bank and pays the loan every month with a monthly installment, that’s the EMI. When you return the loan to the bank, you have to pay some more money along with the total amount (Principal) you have taken. Which we call Interest And the amount of interest is also added along with the monthly installment.

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How EMI Works

As we told you what is EMI, and you definitely get to know it. When we return the money taken for the loan with monthly installments, we call him EMI. Now we will tell you how EMI works. Whatever loan you have taken from the bank, that money is divided according to time, along with Interest. And that interest also has to be repaid in monthly installments.

Suppose you have taken a 100,000 Rupees loan for 1 year and supposed rate of interest is 10%. Then you will have to pay Rs 8,792 in 1 month. And in this, you will have to pay Rs. 8,333 for the Principal amount and Rs. 458 for the interest. You will have to pay monthly installment along with interest.

How To Calculate EMI

To estimate the EMI, firs, you have to open a website in your browser, naming EMI Calculator.Net. You can open this website on both your mobile and computer. The moment you open this website, you will see 3 options.

Home loans, personal loans, car loan and the kind of loan you are taking, Select him from there, For example, you want to calculate the EMI of the Personal loan. First, enter the amount and rate of Interest and time duration for which the loan is taken.

After entering the values, click on CALCULATE. The result in front of you will be the EMI of that amount.


You assume that you are getting Rupees 500,000 on 10% interest for a term of 3 years. You have to enter all these values in the blanks and calculate the EMI. Below you will see the calculation of EMI that i.e. your EMI or monthly installment Rupees 16134, total interest is also there written below EMIThat is, how much interest is on your total loan money.

what is EMI and How it Works?
Calculate your EMI

As if you had filled up to 5,00,000 rupees and had to take a loan at 10% interest rate, you have to give rupees 80809 as an extra amount other than Rupees 500,000 in three years. Your total amount will be Rs 5,80,809 for repayment. so in this way you can find out the EMI of your loan in this way.

Ways To Repay Monthly Installment

You can pay the monthly installment in two ways. The first is to pay online via internet and the other way is offline. For online repayment of EMI, you have to give complete information about the signed check or your debit or credit card.

All these details should be filled during Loan Process, after that the EMI will be automatically deducted from your account every month. And if you choose the offline way of paying the monthly installment, you have to pay your installment money by going to the bank.

Today we have told you a very good information in this post. We told you what is EMI and how it works? If you really like this post then do not forget to share it and if you have any question or suggestion about EMI then you can ask us by commenting below.



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