Whether you are taking a personal loan from a bank to meet some emergency or housing loan to purchase your dream home, the first word that you hear is EMI (Equated Monthly Installment). The amount of the loan that you will avail will depend on the EMI amount that you can pay every month.

EMI is the amount payable to the Bank or other lending institution every month, till the loan is paid back in full. It consists of interest on the outstanding loan amount and part of the principal to be repaid.

This is an easy way for individuals to repay the loan as the huge loan will be split into affordable eqauted installments.

At the same time its an easy way for banks to hide the huge interest rate component with the help of small EMI !!!