EMI means monthly equated monthly installment.
This means if you take a loan from a bank or any other financial institution then you can pay principal + interest in several installments.
For Example: if you take a 100 Rupees loan from the bank at a 10% annual interest rate.
then monthly installment will be 10.25 Rupees.
so that means if you pay 10.25 every month after 1 year your 100 Rupees loan and principles + interest will be paid.
if you paid 10.25 Rupees every month for one year then you paid 22.97 Rupees as an interest amount.
How to calculate EMI
you can calculate the EMI amount of any type of loan just using EMI Calculator. Using EMI Calculator you can check what is the EMI amounts you have to pay after taking a loan from a bank.
You just have to put the loan amount, loan interest rate, and the years ( which is how much time you will take to return the loan amount).
the more time means more interest amount you have to pay and more time means you can pay little installment amount.
Advantage of EMI
the main advantage is you don’t have to pay all the principal and interest amounts. most of the people can’t pay the huge amount. that’s why the installment is good.
when you take a loan then you can decide how much money you can pay every month.
according to your monthly loan payment ability, you can choose the EMI Amount.
If you choose to pay a very small amount as an EMI return, then you can choose a very long time to pay . so that the EMI amount will be decreased.
Disadvantage of EMI
The disadvantage of EMI is the interest rate.
if you take a loan for the long term then the loan amount will be very high. this is the main disadvantage.