Equated Monthly Installment (EMI)
An equated monthly installment (EMI) refers to a fixed payment sum made to a lender by a borrower at a specific date each month. EMI is used as a means to pay principal and interest monthly so that the loan is paid off in full over a definite number of years. EMI is used to pay common loans such as student loans, auto loans, and real estate mortgages. EMI ensures the borrower pays a fixed rate over a period to the lender over some years to retire the loan.