Availing loan from banks/ NBFCs is easy if you have a good credit profile.The problem lies in repaying monthly installments regularly due to fixed salary income &fluctuating budget. Salary’s substantial part (80-90%) of junior to middle level executives goes towards rental, grocery and travel expenses; this leaves a couple of hundreds for loan servicing. Very often millennials are stressed on EMI days and try to borrow from friends or office colleagues to serve EMI.
August 13, 2017
However with EMI free loan the situation can addressed, where committed monthly outgo is Rs. 1500/- per lac of Loan.
What’ is EMI-free loan?
EMI stands for equated monthly instalment (Principal + Interest), under EMI Free Loans Interest is paid every month electronically and Principal is paid at the convenience of borrower. Principal payment can be quarterly, half-yearly or a lump-sum amount based on borrower’s cash flow.
EMI Free Loans are available for a period ranging from 1 year to 5 year with minimal paperwork.The cash is transferred into your account within 36 hours of submitting the loan application.
Why should one take it?
Monthly payment obligation under EMI Free Loan is 40% lower than a standard Personal Loan (calculated for 5 Year tenure). This can be absorbed easily in your monthly expense plan with least impact on cash flow. Lower Monthly commitment also means reduced chances of default and better Credit Score.
For ex. Monthly Interest Payment on 2 lac Personal loan at 15% will be Rs. 4756/-, whereas customer will have to pay only Rs. 3000/- per month at 18% under EMI Free Loan, as principal is not to be paid on monthly basis.
There are no prepayment charges with such loans and it gives you complete control over repayment plan.
And ‘how’ exactly are they different?
A typical EMI remains the same during the entire loan tenure. Such loans are calculated as per the reducing balance method. This means, you end up paying higher interest during your initial months as compared to your principal payments.
This problem gets resolved when you choose EMI-free loan. Any bullet payment will bring down your loan outstanding, leading to lower monthly interest payment adding upto overall savings.
‘Where’ can I get such loans?
EMI-free loans for salaried professionals have been innovated by LoanTap, India’s leading technology-driven online platform for delivering loan products. Such loans can be availed on LoanTap’s web platformwww.loantap.in. All you need to do is fill your information online, download documents as per the checklist, sign them, hand them over to the LoanTap representative, and the loan amount will reflect in your bank account within 36 hours.
‘When’ can I prepay the EMI Free Loan?
EMI Free Loans are fully flexible product. Your first principal payment gets due at the end of 6months. On the due date or afterwards you can make an online loan closure transfer of outstanding amount. This will lead to loan closure and NOC from lender.