EMI (Equated Monthly Instalment) is the fixed amount you pay each month to clear a loan. It bundles principal repayment and interest, calculated so the loan ends exactly at the chosen tenure.

Three levers move your EMI: principal, rate and tenure. Lowering principal (via a down payment) drops EMI proportionally. A lower rate cuts interest cost sharply over long tenures. A longer tenure reduces EMI but increases total interest paid.

Processing fees and moratorium periods quietly raise the real cost of a loan. A 6-month moratorium can add years of interest because the unpaid interest is capitalised into the principal.

Prepayments are the single most effective way to save on a loan. Even a small extra amount each month, applied directly to principal, can shave years off tenure and lakhs off total interest. Always check if your lender charges a prepayment penalty.

When comparing offers, look beyond the headline rate. A loan with a slightly higher rate but no processing fee and free prepayment is often cheaper than a low-rate loan with steep fees.