How EMI loans work
The same amount,
every month,
until it's done.
An EMI — Equated Monthly Instalment — is a loan repaid in identical payments. No balloon at the end, no rate that moves under you. You know the number on day one, and it never changes.
What you're actually paying
Every instalment is two things at once.
Part of each payment covers the interest owed that month. Whatever is left reduces what you borrowed. As the balance falls, the interest portion shrinks and the principal portion grows — so the loan closes faster the further in you get, even though the payment never moves.
The formula
EMI = P × r × (1 + r)n ÷ [ (1 + r)n − 1 ]
- P — the principal. What you borrow: €3,500 to €15,000.
- r — the monthly rate. Your annual rate divided by twelve. At 14% a year, r = 0.011667.
- n — the number of months. Between 6 and 15.
A worked example
€6,000 at 14%, over 12 months.
Here is every single payment, start to finish. Nothing is rounded away and nothing is held back until signing.
Monthly payment
€539
Total interest
€465
Total repayment
€6,465
| Month | Payment | Interest | Principal | Balance left |
|---|---|---|---|---|
| 1 | €538.72 | €70.00 | €468.72 | €5,531.28 |
| 2 | €538.72 | €64.53 | €474.19 | €5,057.09 |
| 3 | €538.72 | €59.00 | €479.72 | €4,577.36 |
| 4 | €538.72 | €53.40 | €485.32 | €4,092.04 |
| 5 | €538.72 | €47.74 | €490.98 | €3,601.06 |
| 6 | €538.72 | €42.01 | €496.71 | €3,104.35 |
| 7 | €538.72 | €36.22 | €502.51 | €2,601.84 |
| 8 | €538.72 | €30.35 | €508.37 | €2,093.48 |
| 9 | €538.72 | €24.42 | €514.30 | €1,579.18 |
| 10 | €538.72 | €18.42 | €520.30 | €1,058.88 |
| 11 | €538.72 | €12.35 | €526.37 | €532.51 |
| 12 | €538.72 | €6.21 | €532.51 | €0.00 |
| Total | €6,464.67 | €464.67 | €6,000.00 | €0.00 |
Notice the first payment is mostly interest and the last is almost all principal. That is the whole mechanism.
The three levers
What moves your monthly number.
Amount
Straightforward: double what you borrow and you double the payment. Borrow only what the next step actually needs.
Rate
Between 12% and 16% a year, set from your application. Across our range it moves the monthly payment by only a few euros — it is the smallest of the three levers.
Term
The big one, and the one with a catch. A longer term lowers every payment but raises the total interest, because you hold the balance for longer. Shorter costs less overall; longer breathes easier month to month.
The same €6,000 at 14%:
€1,041 / month
over 6 months — €247 interest
€539 / month
over 12 months — €465 interest
€438 / month
over 15 months — €575 interest
What an EMI is not
It is a loan. Nothing is converting later.
There is no equity component, no warrant, no option to convert the balance into shares. You keep 100% ownership of your business, at every stage. When the final instalment clears, the relationship is settled — and if circumstances turn against you, talk to us and we will work out a payment plan that fits.