EMI and your Bank:

For a fixed interest rate the EMI remains fixed provided the total amount is paid within the given period. Financial institutes prefer collecting most of the interest component payment in first half of the tenure. The first EMI has the highest interest component and lowest and principal component whereas the last EMI has the lowest interest component and the highest principal component. In case a person is able to make pre-payments either the tenure of the loan gets reduced or the amount of EMI reduces or a mixture of both. The scenario reverses if the borrower is not able to pay EMI on time. In case of inflation the central bank charges a higher repo rate to discourage financial institutes from borrowing money from center and further lending it to the people. This helps in reducing the supply of money and bringing down the inflation rate. On the other hand, whenever there is a deflation central bank decreases the repo rate making the interest rates at which financial institutes end money less thus, increasing the supply of money as more people borrow at lower interest rates.