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Which banks Provide Reducing Principal Can Loan

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NShah said:
Reducing principal ? How this works ?
For knowledge purpose
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fixed principal type of loan is where if you take loan of 1L for 5 years, every year interest is calculated on same 1L till 5th year end.
where as in reducing type of loan is every emi has a component of principal and interest and interest is charged on remaining amount of principal on every EMI.
 
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pradeepG said:
fixed principal type of loan is where if you take loan of 1L for 5 years, every year interest is calculated on same 1L till 5th year end.
where as in reducing type of loan is every emi has a component of principal and interest and interest is charged on remaining amount of principal on every EMI.
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So we can call it fixed rate of interest ?
 
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NShah said:
So we can call it fixed rate of interest ?
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rate of interest is another component and principal and interest parts on EMIs are differenet things of a loan.
fixed rate of interest = rate of interest is fixed irrespective of RBIs repo rate. ex:- 9.10%
floating rate of interest = rate of interest is RBI repo rate + x%. ex:- 8.5% + 0.5% (8.5% being RBI reporate)
would suggest a separate thread for this calculation thing 🙂
 
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SBI autoloans are calculated on monthly reducing balance only. They calculate even daywise difference also. i.e. if your loan SI date is set as 5th, then they'll calculate interest until 5th based on existing principle & then from 6th to month end after subtracting the EMI amount. And then the interest is added to the principle by month end.
 
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bsc0008 said:
SBI autoloans are calculated on monthly reducing balance only. They calculate even daywise difference also. i.e. if your loan SI date is set as 5th, then they'll calculate interest until 5th based on existing principle & then from 6th to month end after subtracting the EMI amount. And then the interest is added to the principle by month end.
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thanks. do they do it by default or we have to separately request them for this? as what i had a word with a sbi agent he said it is not on reducing principal...
 
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