Equated Monthly Installment loan is the amount payable every month to the bank or any other financial institution until the loan amount is fully paid off. It consists of the interest on loan as well as part of the principal amount to be repaid.
Last Updated Date: May 16, 2022
Founded in 2002 and promoted by prominent Nepalese celebrities, Siddhartha Bank Limited (SBL) is today one of Nepal's steadily growing banks. Although the promoters come from a wide range of industries, they have tremendous market knowledge and share their valuable insights with the Bank in order to develop it. Siddhartha Bank has been able to come up with a wide variety of products and services that best serves its clientele within a short period of time. Since the beginning of its operations, Siddhartha Bank has been consistently reporting growth in its portfolio size and profitability. The administration of the bank is highly competent. In order to become one of the most promising commercial banks in the world, Siddhartha Bank has been able to gain substantial confidence from clients and all other stakeholders. The Bank is completely committed to the satisfaction of customers. An indication of its dedication to customer satisfaction is the variety and scope of modern banking products and services that the Bank has offered. It is this dedication that helped the Bank record quantum growth each year. The Bank is positive and optimistic that it will be able to preserve this trust and step even further towards its goal of being one of the industry's leading banks.
An equated monthly installment (EMI) is a fixed payment amount made by a borrower to a lender at a specified date each calendar month. EMI stands for equated monthly installment. It refers to periodic payments made to settle an outstanding loan within a stipulated time Equated monthly installments are applied to both interest and principal each month so that over a specified number of years, the loan is paid off in full. In the most common types of loans such as real estate mortgages, auto loans, and student loans the borrower makes fixed periodic payments to the lender over the course of several years with the goal of retiring the loan. There are two ways to calculate EMI: the flat-rate method and the reducing-balance (or reduce-balance) method. Both take into account the loan principal, the loan interest rate, and the term of the loan in their calculations. As soon as you purchase something on a credit card with an EMI option (that is, doesn't demand payment in full each month), your card's available credit limit is reduced by the total cost of the goods or service. The EMI on credit cards then works much like a home loan or a personal loan: You pay back the principal and interest each month, gradually reducing your debt over a period of time until you pay it off in full. EMI is deducted from a credit card using the reduce-balance method.
EMIs differ from variable payment plans, in which the borrower is able to pay higher amounts at his or her discretion. In EMI plans borrowers are usually only allowed one fixed payment amount each month. The benefit of an EMI for borrowers is that they know precisely how much money they will need to pay toward their loan each month, which can make personal budgeting easier. The benefit to lenders (or investors the loan is sold to) is that they can count on a steady, predictable income stream from the loan interest. The EMI can be calculated using either the flat-rate method or the reducing-balance (as the reduce-balance) method. The EMI flat-rate formula is calculated by adding together the principal loan amount and the interest on the principal and dividing the result by the number of periods multiplied by the number of months.
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