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Are you planning to buy an asset? However, due to the unavailability of liquid cash, you must be thinking of an EMI option. Hence, it is imperative for you to know what is EMI payment and down payment.
An equated monthly instalment (EMI) is a set amount of money paid to a bank or lender each month as part of the repayment of an outstanding loan over a set period of time.
Simply described, EMI is a service provided by banks and other financial institutions to its customers that allows them to borrow money for immediate cash flow needs and then repay it in instalments over a set period of time at a fixed rate of interest. The user is expected to make these payments on a certain day each calendar month. The EMI amount can be paid by check or using an online mode such as the auto-debit service.
EMI consists ofdebt repayment
Interest payments
The following mathematical formula is used to determine the EMI:
EMI = P × r × (1 + r) ^ n / ((1 + r) ^ n – 1)
Where
P stands for the loan amount.
The rate of interest is determined on a monthly basis and is denoted by the letter ‘r’
n denotes the term of the loan (in months)
Down Payment is a payment option available on some products that allow you to pay around 25% of the product price at the time of purchase (this number varies depending on credit cards) and convert the remainder into an EMI on your credit card.
The Down Payment and the first EMI instalment will be due in your credit card's next billing period.
I hope this answer would help you in understanding the basics of down payment in EMI, and what is EMI.
Calculate your EMI with the help of the NoBroker EMI calculator.Read More:
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What is EMI Payment?
Pratik
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3 Year
2022-04-06T19:03:13+00:00 2022-04-06T19:03:14+00:00Comment
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