in-card Post your Answers

How is an EMI against a loan calculated?

in-card Responses

An EMI has 2 components

An EMI has 2 components in every instalment - Principal (P) and Interest (I). Since the EMI is fixed, each instalment has a certain principal component and a certain interest component. Interest is computed based on the outstanding principal. Early in the tenor of a loan, the principal outstanding in the highest, and hence the interest component of each instalment is high. As the tenor progresses, the interest component reduces, as the principal outstanding becomes lower. P + I is constant in eah EMI. Early in the loan the "I" component is the highest (on account of the loan principal being the highest) and as the loan progresses the "I" component becomes lower and the "P" component of each EMI increases..


Replied on 17, November , 2015

An EMI has 2 components in every instalment Principal (P) and Interest (I). Since the EMI is fixed, each instalment has a certain principal component and a certain interest component. Interest is computed based on the outstanding principal.An EMI has 2 components in every instalment Principal (P) and Interest (I). Since the EMI is fixed, each instalment has a certain principal component and a certain interest component. Interest is computed based on the outstanding principal.

Check your Free Credit Score Online

As part of our efforts to make the end consumer services affordable and available at price points which are favourable to the customer, CreditMantri may receive fees / commissions from lenders.

CreditMantri ™ is a registered trademark of CreditMantri Finserve Private Limited. All Rights Reserved. Product name, logo, brands, and other trademarks featured or referred to within Credit Mantri are the property of their respective trademark holders.

CreditMantri was created to help you take charge of your credit health and help you make better borrowing decisions. We support customers with every kind of credit profile - those who are new to credit and have a minimal or nonexistent record; those who have a problematic history; and those who already enjoy a healthy profile. If you are looking for credit, we will make sure you find it, and ensure that it is the best possible match for you. How do we help you? We enable you to obtain your credit score instantly, in real time. We get your Credit Score online and provide a free Credit Health Analysis of your CIBIL or Equifax report. Based on the analysis, we help you discover loans and credit cards best suited for your credit profile. We help you understand your Credit Information Report (CIR) and offer practical and personalized recommendations, tailored to help you improve your score and become loan-eligible. We are a one-stop shop for all your credit needs. We make it easy for you to browse through and compare the various financial products on offer on the market; access our free and user-friendly online tools; and finally, enjoy a stress-free application process with quick approvals. We ensure that you have a high probability of being approved for the loan or credit card you apply for as we only suggest products pre-matched to your profile. We help you avoid loan rejection by carefully determining your eligibility and matching you with the right lender/product. We achieve this with a cutting edge combination of data science, technology and credit management that ensures that both lenders and borrowers have a transparent common platform to make their decisions. We treat your data with the utmost confidentiality and will never share or sell it to anyone. That is our CreditMantri guarantee. Our dedicated and best-in-class customer service will go the extra mile (or two) to support you on every step of your credit journey. Our 4,20,000 happy customers are our best testimonial.

CreditMantri is India’s No. 1 site for Credit Analysis and Free Credit Score Online. Let us help you take control of your credit goals and unlock the door to your financial freedom.