What is EMI, Equated monthly installment

Often, many of us take loans for their work, business, house, building construction, for purchasing products, and most of the loans are taken by banks though there are many finance companies from whom we can get loans.

And if you are shopping online, you have definitely used large eCommerce companies like Amazon, Flipkart, maybe you noticed that they have the option of EMI that we can use to shop.

So what is EMI and why is it so popular and you will be happy to know that online shopping has become much easier due to EMI.

What is EMI

Emi’s full form is Equated monthly installment, we take a loan according to our requirement, and then it’s amount does not matter it will be called a loan, whether it’s a big amount or small.

And the way to repay that loan is called EMI. By the way, if you take anything on loan anywhere, it is obvious that interest will be charged, that is, in addition to the basic money, we also have to pay interest.

But you may have also heard no-cost EMI, although this option is available only on online shopping sites and the biggest advantage is that we don’t have to pay any interest.

But if you want to take another loan or buy something in addition to shopping, you have to pay interest, and the interest rates of all companies/banks are different.

So let us tell you in these two ways what is EMI, first buying the vehicle on EMI and the second home loan

Whether you have specific information about EMIs or not, you will definitely know that vehicles are purchased on EMI such as cars, bikes, and an example of this is here –

Let’s know what is EMI by purchasing a car

What is EMI

As you can see in the image above, this is a monthly installment of a car (Hyundai Elantra) for 3 year loan period (Tenure) 65,552 INR

You can see the final price of the car shown above is about 20,00,000, and by adding interest the payable amount is 23,60,232 INR and that too after the downpayment, though you can choose another loan period (Tenure) too, it will affect your interest.

Now we have to repay this amount 23,60,232 INR in 3 years, which you have to pay every month, 3 years means 36 months, that is, your EMI for this amount will be 65,562 INR (your loan amount will be divided by months of your tenure) this monthly payment is called EMI.

Suppose you take something on EMI and your total loan amount is about 2, 00000 INR, and its tenure you have chosen 3 years, your monthly EMI will be about 5555 INR, which means you have to pay about 5555 INR monthly until the tenure.

And of course, everyone can’t pay a huge amount at once, but with the help of EMI, you can make it easier.

Let’s know what is EMI with the home loan

What is EMI

Let us assume that you take a home loan, which is 5,00,000 INR, whose tenure we choose three years, the total amount after the 6.90% interest rate will be 5,54,964 INR (financial companies, banks ‘ interest rates may vary)

So the monthly EMI of this amount for three years will be 15,416 INR, that is, you can build your house at once by taking a loan from a bank or finance company and you can pay that large amount in installments that will be called EMI.

Although it may take a while for EMI to take something offline process, it is not that EMI is not used, EMI is used by a lot of peoples, profits of banks and finance companies depends on their interest rate, loan amount, and loan period (tenure).

But you will be happy to know that in the online world the option of “No cost EMI” is also available, which is a very good option and it is also used a lot, “No cost EMI” means you will replay only the basic amount.

You don’t have to pay any interest on it. If you use sites like Amazon, Flipkart, “No cost EMI” can prove to be the best option for you.

So we have given you all the information about the EMI, what is EMI, but if you still have doubts about EMI, you can ask us in the comment, and if you want to know about the No cost EMI, you can read our next article.

Because no cost EMI is a great option, because if you want to buy something that costs 10,000 20,000 30,000 50,000 + INR, there is nothing to worry about if you can’t pay that at once.

You can buy it and that too with 0 downpayment, i.e. you won’t have to make any payment when you buy it, and that product will be delivered to you for free, and you can repay its amount in installments.

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