When you Borrow loan from a bank, Your loan carries other charges as well apart from interest that may include Processing Fee which bank charges to process your file. You repay the loan in equal monthly installments, or EMI, consist of principal as well as interest as its constituent. Since you pay an equal amount month after Month, these payments are called equal monthly installments. The EMI depends on the amount of the loan, the interest rate and the term of the loan. It is an unequal combination of principal repayment and interest cost every month. In the Beginning bank recovers their interest payments and increasingly more of the principal repayment by the end of the loan tenure. EMI amount should range maximum to the 40% of your monthly income. One should consider offers from various banks as it may differ from one bank to another bank. Here is the Loan EMI calculation sheet in excel format..