1. What is an EMI?

EMI (Equated Monthly Installment) is a fixed amount you pay monthly to repay your loan, which includes both the principal and the interest.

2. How is EMI calculated?

EMI is calculated using the formula:

Where:

• P = Loan amount
• r = Monthly interest rate 
• n = Loan tenure in months

3. Can I align my EMI payment date with my salary date?

Most lenders allow you to choose an EMI date convenient for you. This helps avoid payment delays and associated penalties

4. Can I change my EMI amount during the loan tenure?

Yes, you can adjust your EMI by:

• Opting for prepayment (reduces tenure or EMI)
• Loan restructuring

5. What happens if I miss an EMI payment?

Missing an EMI can lead to late payment charges, an increase in interest costs, and a negative impact on your credit score.

6. Can I pay my loan EMI early?

Yes, you can prepay. Prepayment reduces either the loan tenure or the EMI amount. Some lenders may charge prepayment penalties; check your loan agreement.

7.  Does my credit score impact the EMI amount?

• A higher credit score can lead to lower interest rates, reducing your EMI. Lenders view high credit scores as low-risk, offering better loan terms.

8. How does the tenure affect the EMI amount?

• Longer tenure = Lower EMI but higher total interest
• Shorter tenure = Higher EMI but lower total interest

9. How is the EMI split between principal and interest over the loan tenure?

Initially, the EMI primarily covers interest, with a smaller portion going toward the principal. Over time, the principal component increases as the interest reduces.