how emi break ups are done in personal loans

How Your EMI Breakup When You Take a Personal Loan?

Personal Loans can be utilised in any situation; whether you require money to expand your business or if you’re running low on cash. However, you need to understand how to calculate EMI on your Personal Loan so that you can plan your finances better.

How EMI Works?

EMI stands for Equated Monthly Instalment factor. A monthly instalment is a fixed payment made by a lender to a borrower at a specified date every month. EMIs are used to partially pay off both the principal and interest on a loan each month so that over a specified time period, the loan is paid in full. If you want to take a break from paying your EMI, check out Bajaj Finserv. They provide you with a 3 month EMI holiday.

The Break-Up

You take a loan and pay the contracted EMI amount every month in order to clear that loan. A part of your EMI goes towards paying the interest on your loan, and the rest goes towards paying for your actual loan (principal) amount. In this way, you are reducing the amount you borrowed, and as your loan reduces, the interest paid on it reduces as well. Although your EMI is usually fixed, it’s internally split into principal and interest repayments.

What the Banks Do?

During the initial time of repayment, the interest on your loan forms most of your EMI, and this amount decreases as time goes on. The principal or actual loan amount starts off comparatively low, but as the months go by, it starts to form a larger part of your EMI payment.

Here’s an Example

Let’s take a simple example of EMI break ups on Personal Loans. Let’s say that your monthly EMI is INR 10,000 and you have to pay this sum for the next 12 months. This is a rough estimate of how your EMI payment would be split between interest and principal.

Month Interest Payment Principal Payment
Month 1 4100 5900
Month 4 3500 6500
Month 7 3000 7000
Month 9 1500 8500
Month 12 300 9700

As you can see, your interest consolidates a massive portion of your EMI during initial payments and gradually decreases as the loan tenure nears completion. Taking a bigger Personal Loan means that you’ll have a higher EMI, but only a small portion of that amount will actually go towards repaying your Personal Loan. in the initial stages. If you avail the services of Bajaj Finserv, you can enjoy the benefits of taking a Personal Loan, such as, no limit on prepayments up to 6 times a year and you can take a loan of up to 25 lakhs! You can also calculate your EMI using their Personal Loan EMI calculator.

Apply for Personal Loan Check your Loan Eligibility Calculate Your EMI

A Step-By-Step Guide To Underwriting A Business Loan

Loans are available for a large number of business needs, from working capital term loans, short term working capital loans, business development loans, business investment loans as well as business loans for new business and business loan finance. As you prepare to apply for the relevant loan for your existing or new business, let’s discuss how commercial loan processing works.

When you apply for a business loan from a lender, the lender underwrites the loan or begins a process of analysis. This analysis applies to all the information you provide in your application as well as a search of your credit history to make sure you meet the loan criteria.

Here’s what it entails when it comes to small business loans:

  • Income Surplus

Yes, your business needs to be profitable; however, it is important that your business cash flow reveal that there is excess cash in the system to be able to repay the principle along with the interest every month. After all, the underwriting process from the lender’s side needs to determine that the cash rotation shows surplus that can be used to repay the business finance loan.

  • Collateral

This is an additional security that the underwriting process requires, which ensures that the business owner or the business has an additional form of security to repay the business loan. Collateral can range from the premises being used by the business, a house or any other building or commercial space owned by the business or the business owner. Further inventory, cash savings or deposits or even business receivables may be considered as collateral.

  • Credit Worthiness

From the lender’s point of view, it is inevitable that you will treat the new debt much in the same way that you have treated credit in the past. Therefore, the process looks at how the business has treated past loans repayments. In case you are applying for a business loan for new business then the credit worthiness of the business owner is considered. A good history is reflected with a high credit score, which is maintained by various credit agencies.

Also Read : Important Things You Should Know Before Opting For A Business Loan

  • Equity

You may be the owner of the business for which you seek a business loan, however, the underwriting process seeks to know how committed you are to your business. Have you invested in the business? Do you own a significant portion of your business? This goes to establish the belief the owner has in his business. After all, why will someone who does not have commitment strive to make the business excel?

  • Additional Guarantees

Just like the borrower is keen to repay the loan and clear the debt in the quickest possible way without hurting the business, the credit institution needs to be absolutely sure that the money being advanced by it is going to be repaid at the predetermined dates. To ensure this, the personal guarantee of the business owner may be required as well.

Once you submit your application, the lender begins the underwriting process, which determines whether or not you are eligible for the business loan. For some lenders, this process is complicated and for others, it is relatively simple. Lenders like Bajaj Finserv do not require guarantors or collateral for loans and offer an easy online application for those looking for small business loans.

Apply for Business Loan Online Check your Business Loan Eligibility

What you need to know about a Loan Against Property

A loan against property is a loan that is given against the mortgage of property. The loan is provided at a certain percentage of your property’s market value, usually somewhere between 40% and 60%.

The loan against property interest rates make them more attractive than personal loans. If you were to take a personal loan, the interest rate would be 16% – 21%. Taking a loan against property means you pay interest at the rate of 11% to 14.50%. This difference is because your property is guaranteed against the loan. If you avail the services of Bajaj Finserv, you can get up to 3 months off on your EMI payments.

How the Bank Goes About It

The mortgage loan process includes the following:

If the property you mortgage has more than one owner, all of you will have to apply together to get the loan.

You can take a loan for any freehold property – from a plot of land to your house. It doesn’t matter if you’ve rented out the house or if you’re living in it. For more types of loans against property, avail Bajaj Finserv services, and you’ll get a wide range to choose from.

The bank checks all the documents related to the title of your property, like electricity and telephone bills, for residence proof. They also need identity proof like your passport, PAN card, or voter ID card. If you’re employed, they need your bank statements for the past 6 months, and if you’re self-employed, they require your financial statements for the past 2 years.

The minimum age at which you can borrow a loan is usually 24 years, and the maximum age for an employed person is 60, and a self-employed individual is 65.

The bank also reviews your CIBIL or credit score and goes through your payment track record. Keeping a good CIBIL score will increase your chances of getting your loan application approved. Based on all of this information, your bank will ascertain your capacity for repayment and provide you with the loan if they are satisfied.

Here’s Why You Should Take One

Now that you’ve understood how loan against property works, opting for one is great choice if you’re ever in need of money. Here’s why:

The tenure of an LAP (Loan Against Property) is longer than most other loans. You can get one for a maximum period of 10 years. Since their rate of interest is lower, and they have such a long repayment time, it’s a cheaper option than any other loan.

Just like any other loan, you can take a LAP without disclosing your motive for the loan. Like a home loan, partial prepayment as well as full prepayment is allowed with regard to LAPs. This prepayment is generally free from penalties. If you contact Bajaj Finserv, they can provide you with a loan of up to 21 crores on your property. Find out more on their loan against property FAQ.

The property continues to be under your ownership even after you receive the loan. In case you are unable to pay back the loan, you can sell your property and settle the debt. This will also help you procure additional funds.

If the value of your property increases, you can refinance it to increase the loan amount. So if you’re a businessman, it’s the an excellent option for you to expand your business.

The processing of an LAP is much faster than a house loan as the property already exists. You can also continue to live in your home while making use of the mortgage money.

Your asset does not lay idle, as its value is utilised by putting it to productive use.

As a general rule, be cautious while taking out a loan; it must be backed up by solid reasons and assurances that you can repay it. If you need money immediately, a loan against property is a simple way to procure quick, liquid cash.

<<Click here to apply for our online Loan Against Property>>

How to maximise your savings on your Home Loan interest payments

Investing in real estate is a great way to fatten your bank account in the long run, but coming up with the initial capital is no mean feat. You’re most likely going to take a home loan to be able to afford the property in question.

Because of the large sums of money involved, it’s important to save as much as possible during the transaction. In this article, you will learn about the various ways you can save money on your home loan.

Hunt for the Best Interest RatesThe first step to saving on your home loan is to find the best home loan interest rates possible because this affects the EMI you will be paying monthly. The money you’ll be spending on this can add up to quite a large sum if you opt for a loan that has an extended tenure. The lower your interest rate, the less money you’ll have to pay back over time, saving you some money in the process.

If you’re looking for the best Interest Rates, you should check out the Home Loans offered by Bajaj Finserv. The interest rate that they offer is among the lowest that you can get in India.

It’s important to save on additional fees when applying for a Home Loan, if you apply online for a Home Loan with Bajaj Finserv, you will be charged a processing fee of only 0.8%.

To Fix or Float?Another great way to save money on your home loan interest is to pick the type of interest rate that works best for you. You can choose between loans that have fixed or floating interest rates. Let’s take a look at what these terms mean.

If your loan has a fixed interest rate, it means that the interest rate remains unchanged for the whole tenure of the loan.

Floating interest rates, on the other hand, are set by a reference, and might go up or down during the tenure of the loan depending on the reference. The reference is called the ‘Prime Lending Rate’ or the ‘Floating Reference Rate’.

After you’ve done your research, if you think that the Prime Lending Rate is likely to rise in the future, go for a fixed interest loan. If you think that the interest rate is likely to go down in the future, it’s advisable to go for a floating interest rate. When the reference rate falls, your interest rates also decrease and you end up paying less till it rises again.

Make the Most of Tax DeductionsBecause the government wants more people to invest in real estate, which bolsters the economy, an incentive has been put in place to ease the burden on the consumer with regard to home loan payments. This incentive takes the form of tax deductions. You need to be aware of the deductions that you’re entitled to if you want to save as much money as you can on the interest.

Utilising the tax benefit on home loan is one of the main ways you can save money on the interest that you will be paying. You are entitled to tax deductions on both the principal amount, and the interest you pay over time.

If the home loan is for the construction of your first home, which you will be living in, you’re eligible for a deduction of up to INR 2 lakhs if the construction of the house is completed within three years of the financial year during which the loan was taken.

If it’s your first home and you’re either renting it out or it’s vacant, you are eligible for a tax deduction on the whole interest amount, without any limits. This applies for your second home as well.

These are the various avenues that are available to you when you’re trying to save money on the interest you pay on home loans. Remember to choose your interest rates and type carefully, and make use of all the deductions that you are eligible for.

<< Click here for a 5-minute online Home Loan approval >>

<Click here to check your Home Loan eligibility>>

5 smart ways to plan your EMIs

Once you get a loan, paying back the amount can, sometimes, be a quite a task. Large loan amounts are usually paid back in the form of Equated Monthly Instalments or EMIs. In most cases, people pay the hefty down payment by borrowing from other sources, and when it comes to EMIs, a dent is created in your finances. That is why extensive planning is required when you opt for EMIs. Now the question is, “How can you plan your EMIs?” Here is a list of smart methods to customise your EMI, so that it does not create any strain on your financial condition.

  1. Borrow Judiciously
    Nowadays, with loans becoming easily available, many people are looking for a large loan amount without even realising if they can afford it, simply because they are eligible for it. While a large amount might seem easily repayable, it doesn’t always happen according to plan. You must always take into consideration the possibilities for unfortunate incidents like a job loss or a medical emergency. It is advised to only borrow money to an extent where you can repay the amount comfortably. You can plan your budget for loan EMIs using a home loan EMI calculator or a personal loan EMI calculator. If you are looking for affordable loans, you can try Bajaj Finserv that offers the lowest home loan interest rates and personal loan interest rates.
  2. Go with a Higher Down Payment
    While a lower down payment option might look attractive, it is actually the forerunner to higher instalments. If you are planning to buy a house, instead of jumping at a low down payment offer, try to raise a higher down payment. This will eventually ease your burden and you won’t have to pay whopping EMIs for your home loan.
  3. Organise Your Spending
    If you have opted to repay your loan in the form of instalments, one way to avoid a stressful situation is to organise your spending till your instalments are settled. Check unnecessary expenditure on optional requirements and pool those funds to help repay the loan.
  4. Maintain Emergency Funds
    At some point of time or the other, there can be situations where you don’t have the finances to pay the instalment. In such instances, maintaining an emergency fund could help you repay the EMI, even if you run short of money. You must make sure that your emergency fund can be used for at least three to four months during a financial crisis.
  5. Invest in Mutual Funds
    Mutual funds are a reliable investment option, especially where savings are concerned. Instead of spending on discretionary areas, saving in a mutual fund allows you to get better returns in the long run. If you have taken a home loan, healthy savings for 2 to 3 years could play a big part in cutting down your EMI amount. Bajaj Finserv is a good choice for investing in mutual funds, as it offers a full range of products ranging from various asset management companies.

<<Click here to check your Personal Loan eligibility>>

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<< Click here for instant approval on interest-free EMI >>

<Click here to check your Home Loan eligibility>>

Breeze through your loan repayments with this smart guide

Sometimes our dreams exceed what’s in our bank accounts, especially when it comes to taking our business to the next level. A business loan can be the ideal solution to this problem, but you need to consider the repayment process as well. This article will act as your guide to repay business loan by giving you several payment possibilities and tips to repay your loan.

Here are some business loan repayment strategies you should be acquainted with:

Lump sum repayment:

When you make an agreement with your lender to pay one large sum per year, rather than giving them as recurring payments throughout the year.

Periodic interest and lump sum repayment of principal:

When you agree with your lender to only pay interest for a particular time, then pay an amount including both interest and the principal in one lump sum.

Periodic payments of principal and interest:

When you arrange a series of periodic payments of principal and interest throughout the course of a year with your lender.

Amortized payments:

When you pay an equal, monthly payment (EMI) to your lender that includes both the principal amount and interest.

Your next question might be, “but which payment plan should I choose?” The answer to that question lies in whichever payment plan both you and your lender are most comfortable with. Make an educated selection based on your loaned amount and the interest being charged. Financiers like Bajaj Finserv offer a Business Loan EMI Calculator to help you calculate your precise EMI and plan the monthly payments accordingly.

Things to Watch Out for

Some lenders will charge you with prepayment charges on business loans. This means that if you are able to repay your loan earlier than originally agreed to, the lender can charge you a fee to make up for the lost interest. When choosing a lender to take a loan from, try to avoid ones that charge such penalties. Bajaj Finserv for instance, does not issue prepayment charges for their Business Loans, and even allows you to prepay your Loan up to 6 times per year.

They also have a Prepayment Calculator that you can use to help calculate future payments.

Another thing to carefully examine before agreeing to a loan is the business loan interest rate. Besides the actual rate of the interest, you should assess if the lender’s rate is either fixed or floating. A fixed rate means that the interest does not change throughout the period of the loan’s existence, while a floating rate means that the interest can change over time. Both have their advantages and disadvantages, but it is important to obtain these details before agreeing to anything.

The Internet is Your Friend

Some financiers allow you to apply for a business loan online, which can make things more comfortable and convenient for you. Bajaj Finserv offers Business Loans with approval within 72 hours, as well as online EMI payment options. Apply online for a business loan here.

<<Click here for a 5-minute online Personal Loan approval >>

<< Click here to Apply for our 100% Online Buisness Loan >>

<< Click here for a 5-minute online Home Loan approval%>>

Pick up some time-keeping bling with the Great Indian Lifestyle Festival

Imagine having the purchasing power to buy luxurious watches for yourself and your loved ones. The delight and glee on their faces when they see the amazing gifts you have bought for them, is priceless. To amp up the excitement, Bajaj Finserv brings the Great Indian Lifestyle Festival to you. Partnering with watchmaking giant, Titan, Bajaj Finserv is offering you the opportunity to get amazing discounts on your next expensive watch purchase.

Here are all the details you should know about this amazing offer on expensive watches online.

How to Get Those Great Watches

Bajaj Finserv, one of the leading financiers in the country, has launched GILF, a sale where you can avail heavy discounts on your luxury watch purchase and also enter a contest to win some amazing gifts.

The first thing you need to do is avail of lifestyle finance from Bajaj Finserv. Once the loan has been approved, you can visit any outlet of the retail partner and buy watches on EMI. This simple procedure ensures your admission to the contest.

Apart from the discounts on your purchase, you also have a chance of winning some pretty sweet gifts. They include:

  • Up to INR 20,000 cashback daily
  • 18 PlayStation Portables
  • 4 Samsung LCD TVs
  • 1 Maruti Swift

Keep in mind that this offer is for a limited duration and your purchase will only be included in the contest if it’s made from 3rd July 2015 to 30th August 2015.

Why Bajaj Finserv?

A question swirling around in your mind would be why you should opt for Bajaj Finserv for finance on expensive watches? Well, the answer to this question is quite simple. Bajaj Finserv Lifestyle finance offers you easy approval for an amount up to INR 3 lakh and provides you with a convenient Existing Membership Identification (EMI) card. Using the EMI card you can purchase any luxurious watch by simply swiping your card and signing the receipt. Apart from this, the other major benefits provided by Bajaj Finserv are part prepayment facility, online account access, preapproved offers for existing customers, and minimal paperwork.On top of all this, the GILF, an initiative by Bajaj Finserv gives you the chance of availing considerable discounts and winning some amazing gifts. Considering all this, the question you should be asking instead is – “Why not Bajaj Finserv?”

One Simple Step to Win

There is one final step you have to take to officially enrol yourself in the contest. Once you have purchased an expensive watch from the retail partner and financed it through Bajaj Finserv’s interest free EMIs, simply answer this question:


Send in your replies to 9773633633 with the SMS “BAJAJ LIFESTYLE (your answer)”.

If it’s your lucky day, you just might win a brand new Maruti Swift.

Expensive watches in India have gained considerable popularity in the last few years and it’s understandable if you have a craving for wrist-mounted bling. Well, now you can indulge in their pleasure, thanks to the Great Indian Lifestyle Festival from Bajaj Finserv!

<< Click here for instant approval >>

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The Great Indian Lifestyle Festival: Living made easy!

Give your home a brand new look with the Great Indian Lifestyle Festival from Bajaj Finserv. Once you are done with the purchase process the next step is furnishing your new home. But more often than not, you end up compromising on the look of your place due to a lack of funds. Not anymore!

With the amazing interest free EMI finance option offered by Bajaj Finserv you can breeze through all your furnishing needs. To top it off, Bajaj Finserv has partnered with retailers like Godrej, Titan, Lifestyle, Urban Ladder, Hindware and many more to bring you mind blowing discounts and marvellous gifts. Here’s what you need to know about this limited period offer:

Easy Finance with Bajaj Finserv

Why go for a full-blown loan for your home improvement project when you can opt for the quick Lifestyle EMI finance by Bajaj Finserv? Get a relatively hassle-free loan and purchase all the furniture, kitchen equipment, and fitness equipment that you desire. With features like easy loan approval for up to INR 3 lakh, instant approval, part prepayment facilities, and online account access, this offer is perfect for the cash-strapped renovator.

Bajaj Finserv provides you the revolutionary Existing Member Identification (EMI) card that allows you to purchase any lifestyle product by simply swiping the card and signing the receipt.

Opt for lifestyle finance from Bajaj Finserv and you also stand a chance to win some great gifts!

The Whole Story

To avail the offer, simply purchase home improvement items from a selection of retail partners and finance your purchase with the lifestyle EMI options from Bajaj Finserv. The process simply involves applying for an instant approval loan at Bajaj Finserv and checking out a pre-approved list of around 2000 stores spread across 32 cities. Purchase any lifestyle product from a partner store and pay using the EMI card. With this simple procedure you are officially a part of the scheme.

Apart from heavy discounts on lifestyle products, you might also win gifts like LCD TV, PlayStation Portable, INR 20,000 cashbacks and the bumper prize—a spanking new Maruti Swift-ZXI. Keep in mind that the Great Indian Lifestyle Festival is a limited-time offer and only lifestyle purchases made during the period from 3rd July 2015 to 30th August 2015 will be considered valid.

How to Stake Your Claim on Those Goodies

Once you have completed the aforementioned steps, the next thing to do is participate in a simple contest by Bajaj Finserv. Simply answer this question:


Send in your replies to 9773633633 with the SMS “BAJAJ LIFESTYLE (your answer)”.

Drop all your inhibitions about buying on EMI and get your hands on this fantastic opportunity. With the chance of getting great gifts every day, this is one offer you wouldn’t want to let go of!

<Click here to check your Home Loan eligibility>>

<<View Offers>>

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