Understanding Your Home Loan EMI: More Than Just a Monthly Payment

Your Equated Monthly Installment (EMI) is a fixed payment you make to the bank each month, but have you ever looked at what's inside? Every EMI consists of two parts: the principal amount (the actual loan you took) and the interest charged by the bank.

In the initial years of your loan, a large portion of your EMI goes towards paying off the interest. As time goes on, the interest component decreases, and more of your money starts clearing the principal. Understanding this breakdown is the first step toward smart loan management. When you see how much you're paying in interest over the full tenure, you'll be motivated to find ways to reduce it.