Full Form of EMI
EQUATED MONTHLY INSTALLMENT
What is the Full Form of EMI ?
Full form of EMI is the equated monthly installment. EMI is called equal monthly fee. If EMI is stated in simple terms, then it is a type of monthly payment.
If you use monthly installments to repay any kind of loan. It is called EMI. The loan you take. The total amount of that is called the principal. And the additional amount given over it is called interest.
To repay the money taken as a loan from EMI Bank or any financial institution, the bank offers you the possibility to repay the loan amount in installments. For this, the bank sets an amount for you and also sets a period to complete that amount. You must submit the full bank loan in the same period.
According to EMI, you must give an amount to the bank that has both principal and interest, and this amount must be delivered within the established term. If the interest rate increases between the set time limit, then your time limit will also increase. This means that you have more time to pay more EMI.
As the current time is modern, many brands of the market have also come. A lot of times it happens that a person really likes a particular item, but due to the high price of that particular item, people can’t buy it, so the merchant is ready to take the price of the same quantity according to the price monthly .
In such a situation, the customer gets what he wants and the merchant gets the money for that item. Now they are both happy. In this way, EMI is a much better way for everyone.
EQUIPPED MONTHLY INSTALLATION
If you take a mortgage loan from any bank or by credit card, or take a commercial loan or an educational loan or any type of loan from the bank, you should first consider the calculation of EMI.
There must be complete information because the bank withdraws money from the loan through EMI, now large shopping sites such as Amazon, Flipkart, EMI through Paym | The | It gives you the option to do it through EMI
How to calculate EMI
The calculation of an EMI depends on three factors that are the following:
Interest rate: Interest rate charged by the lender, p. Bank.
Loan Amount (Main Loan): The amount borrowed.
Loan tenure: the time provided by the lender to pay off the entire loan, including interest.
Fixed interest rate:
Interest is calculated on the entire principal loan regardless of the fact that with each EMI the principal amount is reduced. For example, a person wants to buy a Tractor and takes a loan for a 4 lakh Tractor, at a fixed interest rate of 12% and has to pay it back in 4 years, then the EMI can be calculated as shown below:
- Buy amount: 400,000
- Flat rate of interest: 12%
- Total duration: 4 years
EXAMPLE EMI: Buy Amount Rs 400,000 divided by 48 months + 12% of buy amount divided by 12 months = 8333+4000=12333
Flat rate of interest is usually applied on short term loans such as Tractor loan and two-wheeler loan.
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