What is EMI?
EMI (Equated Monthly Installment) is a fixed monthly payment that a borrower makes to repay a loan or credit. It includes both principal and interest and is commonly used for personal loans, credit cards, and ecommerce purchases.
How EMI Works
- The borrower selects a loan amount and tenure.
- EMI is calculated based on interest rate, principal, and tenure.
- Payment includes interest (larger in early months) and principal (grows over time).
- In ecommerce, customers can split high-value purchases into EMIs using cards or digital credit.
- Banks/issuers provide EMI plans with different tenures and interest rates.
Benefits of EMI
- Affordable Payments: Spread high-value purchases over multiple months.
- Predictable Repayment: Fixed monthly installment simplifies budgeting.
- Widely Available: Supported by most banks and ecommerce platforms.
Is EMI Secure?
Yes. EMI transactions are processed via banks or regulated financial institutions under PCI DSS compliance.
FAQs
What is EMI?
EMI stands for Equated Monthly Installment, a fixed monthly repayment including principal and interest.
How is EMI calculated?
Based on loan amount, interest rate, and tenure.
Can I use EMI for ecommerce?
Yes, many ecommerce platforms provide EMI options.
Which banks offer EMI plans?
HDFC, ICICI, SBI, Axis Bank, Kotak Mahindra, and others.