How this works
The EMI here uses the standard reducing-balance formula: interest is charged only on the outstanding balance, so the interest portion of each payment shrinks and the principal portion grows over the term, even though the EMI itself stays flat.
Common questions
Does this include processing fees?
Only if you enter them — by default the EMI is calculated on the loan amount alone. If your lender adds a processing fee to the principal rather than charging it upfront, add that fee to the loan amount to see the real effect on your EMI.
What if my lender quotes a flat rate instead of reducing?
A flat rate charges interest on the full original amount for the whole term, which almost always works out more expensive than the same stated rate on a reducing balance — there's no flat-rate option here since it's a different, costlier calculation, not a variant of this one.