EMI (Equated Monthly Installment) is the fixed amount you pay every month to repay your loan. It includes both the principal amount and the interest charged by the lender.
Where: P = Principal loan amount, r = Monthly interest rate (annual rate ÷ 12 ÷ 100), n = Total number of monthly installments.
You take a Personal Loan of ₹5,00,000 at 12% interest for 3 years (36 months). Using the formula, your monthly EMI comes out to ₹16,607. Over the 3 years, you will repay the 5 Lakh principal plus ₹97,858 in interest.