When you take a loan, there are two common ways to pay it back: in small regular instalments (EMI), or in one shot at the end (bullet). Neither is "better" in general — the right one depends on how your money arrives. Here's the difference, and how to pick.
What is an EMI?
EMI stands for Equated Monthly Instalment. You repay the loan in equal pieces — say ₹2,500 a month for several months — each piece covering a bit of the principal and a bit of the interest. The balance shrinks steadily until it's gone.
What is a bullet repayment?
With a bullet loan, you pay nothing (or only small interest) during the term, then repay the whole amount in one payment at the end. These suit short, small loans where a lump sum is coming — a salary, a payout, a harvest.
The pros and cons
- EMI — easier on cashflow. Small, predictable payments are simpler to budget around. The downside: it stretches over more months.
- Bullet — simpler and often cheaper for short loans. One payment, less interest on a very short term. The downside: you must have the full amount ready on the due date, or you're in trouble.
How to choose in one line
Ask: "Do I get money in steady drips, or in one big drop?" Drips → EMI. One drop you're confident about → bullet. If you're unsure whether the lump sum will really arrive, choose EMI — it's the safer bet.
"Match the repayment to the way your money actually comes in. Force a bullet payment on a monthly-salary life, and you'll feel the squeeze on due date." — Didi
Whichever you pick, set up autopay and confirm the total cost upfront. Use the LoanDidi calculator to see exactly what each option would cost you before you decide.