An Equated Monthly Installment (EMI) is a fixed payment amount made by a borrower to a lender at a specified date each calendar month. EMIs are used to pay off both interest and principal each month so that over a specified number of years, the loan is paid off in full.

Interest is calculated on the outstanding loan balance. In the early months of the loan, a larger portion of each EMI goes toward paying interest. As the principal is paid down over time, a larger portion goes toward the principal.

Yes, you can lower your EMI by: (1) making a larger down payment, (2) extending the loan tenure (though this increases total interest paid), (3) negotiating a lower interest rate, or (4) making prepayments toward the principal balance.