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Bespoke Loans: Know everything about EMI Free Loans

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.

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. 

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LoanTap is a fintech platform delivering flexible EMI free loan products to salaried professionals. It uses technology to deliver smart and innovative products for millennials. Borrowers can choose custom- made loan products from an array of offerings like Overdraft Facility, Credit Card Takeover Loans, Rental Security Deposit Loans, Advance Salary Loans and consumer durable loans. Registered as LoanTap Credit Products Pvt. Limited with RBI, it is an NBFC offering unique products and features within the regulatory guidelines, thereby ensuring a fully transparent pricing structure. Headquartered in Mumbai and operational in Pune as well, LoanTap was incorporated in the year 2016 by ex-banking professional Satyam Kumar and former tech professional Vikas Kumar. The duo felt a constant need for credit solutions in the upwardly mobile salaried segment for acquiring assets or for personal consumption. They wished to re-define the retail asset distribution model by eliminating the information gap between producer and consumer and break the clutter of direct sales agents and brokers driven by short-term goals. Hence they integrated their respective specialisations in retail loans and technology domains for 17-18 years each to create a consumer-friendly credit facility in the competitive fintech space. Following an agency-based collection model, the online platform in its first phase has ventured into the low delinquency salaried segment that is characterised by a job experience of merely 2-5 years. The company manages to stand out for its speedy disbursement of loans with an average amount of Rs 4 lakhs within 15 days to 5 years. It also makes a pitch for flexible single and bulk payments that are convenient and cost-effective. Moreover, by being 100% online, it uses minimal human interface to verify the algorithms for predicting loan amounts. With a team of expert professionals manning its operations that includes retail asset and tech professionals with proven track records and CEOs / MDs and CFOs with leading FIs and European giants, LoanTap draws on cutting-edge technology to guarantee a world-class loan origination and management system for its target audience. The online platform has recently closed its first round of funding. Currently focussing primarily on upwardly mobile salaried professionals, LoanTap envisions penetrating deeper into the salaried segment. It eventually aims at tapping the MSME sector with an average loan size of Rs 6 Lakhs by expanding in the top 10 cities of the country and reaching a book size of INR 750 crores in the next 3 years.

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