Securing Hannav Ledger...
Securing Hannav Ledger...
Glossary
Equated Monthly Instalment is a fixed monthly payment comprising principal and interest, used to repay loans over a set tenure.
EMI is the fixed amount you pay every month on a loan — part goes to repaying what you borrowed, part to interest.
EMI calculated using reducing balance method in India. Early EMIs are interest-heavy; later ones repay more principal. Prepayment reduces outstanding principal and total interest. Default triggers penal interest and credit score impact.
₹40 lakh home loan at 8.5% for 20 years → EMI ≈ ₹34,700. Total payment ≈ ₹83.3 lakh including ₹43.3 lakh interest over tenure.
EMI = P × r × (1+r)^n ÷ [(1+r)^n − 1]Fixed-rate loans keep EMI constant. Floating-rate loans adjust EMI or tenure when benchmark rates change per loan agreement.
Late fees, penal interest, and CIBIL score damage apply. Repeated defaults can lead to recovery proceedings and asset seizure for secured loans.
Balance transfer to lower-rate lender or negotiating tenure extension reduces EMI but may increase total interest paid.