| Loan Amount
||Total Payment (Principle + Interest)
Loan Amount : The amount specified in the contract that the borrower agrees to pay back. The amount of points included and various other costs make the loan amount different from the quantity of cash distributed by the lender.
Loan Eligibility: A criteria that has been standardised by lenders to evaluate willingness and ability of a customer to qualify for a loan scheme. Criteria must include monthly salary of borrower and down payment that the borrower agrees to pay.
Down Payment: A payment in part made at the time of purchase of a good, with the promise to make full payment later.
Loan Interest Rate: Interest rate is the amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets. Interest rates are typically noted on an annual basis, known as the annual percentage rate (APR). Higher interest rate means borrower needs to pay more interest.
Loan Tenure: Period from the date of first EMI to the date of the last EMI payment or the date of closure of loan. Longer tenure is cause to high interest payment.
EMI: An EMI refers to an equated monthly instalment. It is a fixed amount which you pay every month towards your loan. It comprises of both, principal repayment and interest payment. Increment in loan amount and loan interest rate always increase the EMI, Where if you want to decrease the EMI than choose a higher loan tenure.
Total Interest: An amount that comprises all interest payments during first EMI to last EMI payed.
Total Payment: An amount that comprises all principal, interest and charges. This amount would be payed by borrower to lender.
Number of Instalments: The total number of payments to pay hole total payment.
Home Loan Amortisation Schedule is the table, which details the following
Outstanding Balance before payment of each EMI
Contribution towards principal repayment
Contribution towards interest payment
Outstanding balance after payment of each EMI
Advance EMI: Advance EMI is a scheme that is quite popular in car loans. By this scheme, you would pay the EMI at the beginning of the month.
Lets say you take a loan of 1 lac INR for a car and your EMI is 10K for 10 months (assuming). By the normal EMI scheme (also called EMI in arrears) 1 lac will be transferred to the car dealer and EMI of 10K will start from the end of the first month. By the advance EMI scheme, the first month EMI would be deducted from the amount disbursed and the remaining will be paid to the dealer. So if you take a loan of 1 lac, by advance EMI less than 1 lac will be paid to the dealer.
The advantage with advance EMI is that, the entire first EMI amount is taken for the principal. So your EMI would be lesser as the principal is reduced at the first payment. From the second EMI, it will be interest and principal as usual.
The disadvantage with advance EMI is that, you need to take a loan for more amount that you need to pay to dealer.
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