Loan Repayment

Loan Repayment

Loan Repayment is the act of settling an amount borrowed from a lender along with the applicable interest amount. Usually, the repayment method includes a scheduled process in the form of equated monthly instalments (EMIs). Such instalments usually include both the principal and interest components, which need to be paid within a fixed tenure. EMI stands for equated monthly instalments. It's a payment made by a borrower to a lender every month at a specified date. The EMI amount remains the same throughout the loan tenure. Part-prepayment is a facility where you pay back a portion of your loan that is more than one EMI. This is a simple way to save on your interest payable. Your part-prepayment amount gets deducted from your principal outstanding as on the month of making the prepayment. You can choose a part-prepayment facility if you have extra cash, and you want to use it to pay off your loan ahead of time. The loan is not repayable on demand and so available for the term of the loan - generally three to ten years - unless you breach the loan conditions. Loans can be tied to the lifetime of the equipment or other assets you're borrowing the money to pay for. At the beginning of the term of the loan you may be able to negotiate a repayment holiday, meaning that you only pay interest for a certain amount of time while repayments on the capital are frozen.