Understanding EMI: How Is Your Home Loan EMI Calculated?

Equated Monthly Installment (EMI) consists of two parts: Principal repayment and Interest payment. ### The EMI Formula: **EMI = [P x R x (1+R)^N] / [(1+R)^N - 1]** - **P** = Principal Loan Amount - **R** = Monthly Interest Rate (Annual Rate ÷ 12 ÷ 100) - **N** = Loan Tenure in Months ### Key Takeaways: - Longer tenure reduces your monthly EMI but increases total interest paid over time. - Prepaying principal amounts early in your tenure drastically cuts your interest burden.