On
the other
hand the
"interest
on reducing
balances"
takes into
account
all payments
made towards
the principal,
and is calculated
only on
the balance
amount.
Most banks
use this
method to
calculate
interests
on loans.
So don't
be misled
- compare
one flat
rate with
another
flat rate,
and one
reducing
rate with
another
reducing
rate, to
make the
most economical
decision.
Repayment of loan
What
is an EMI?
An EMI is
the 'Equated
Monthly
Installment'
that you
pay every
month, towards
your loan
repayment.
This includes
both the
interest
and a payment
towards
the principal
amount.
During
the tenure
of the loan,
the EMI
remains
unchanged.
However,
the break-up
between
interest
and principal
that constitute
EMI changes.
Initially,
the interest
is the major
component
of the EMI,
but in later
years, (as
the principal
amount reduces,
thereby
reducing
the corresponding
interest)
the principal
component
increases.
What
are your
repayment
options?
You
can avail
any of the
following
methods
to repay
your loan:
- Direct
Debit
Facility
- Banque
Misr
- ATM
- Branches
How
can I change
the mode
of my repayment?
If you are
a Citibank
Personal
Loan customer,
the change
will take
about 25-30
days to
be implemented.
You will
need to
give us
your new
preferred
repayment
option,
along with
a proof
of ownership
of the new
account
you wish
to repay
from.
What
if I do
not pay
the EMIs?
Once you
get a loan,
you need
to repay
the loan
as per the
agreed repayment
schedule.
Bounce charges
applicable
at the time
will be
levied,
each time
a payment
presentation
gets returned.
Your bank
is entitled
to take
legal action
if EMIs
are not
paid on
time. There
will also
be additional
penal interests
for delayed
payments,
which can
vary at
the discretion
of your
bank.
If
my payment
'bounces',
what should
I do?
If your
cheque bounces,
please ensure
that fresh
payment
is made
in its stead,
immediately.
This is
essential
in order
to protect
your credit
rating with
your bank
and to avoid
any further
penal interest
or delayed
payment
charges.
What happens if I repay my
loan before
actual tenure?
What
is pre-payment?
A pre-closure
or a pre-payment
is when
you close
the loan
before the
end of the
actual tenure,
by paying
the principal
outstanding
and other
applicable,
additional
charges.
What
would the
final prepayment
amount be?
Your final
prepayment
amount would
include
the following
components.
Principal
Outstanding
|
+
|
Interest
due*
|
+
|
Prepayment
penalty
charges
|
+
|
Penal
interest
(if
applicable)
|
+
|
Bounced
cheque
charges,
if
applicable
|
+
|
Any
other
charges
as
applicable
|
+
|
*Ensure
your bank
gives you
this at
the end
of the month,
during which
you have
pre-closed
your loan.
Interest
must be
calculated
only until
the actual
date of
pre-closure.
Any excess
payments
made by
you, should
be refunded.
Can
I make a
part payment
on my loan?
Yes, you
can.
Customer
Information
shared by
Financial
Institutions
Credit Information
Report (CIR)
is a factual
record of
a borrower's
credit payment
history
compiled
from various
sources.
The information
shared by
us with
benefit
includes
sanctioned
amounts,
current
balances,
amounts
over due,
suit filed
status reports,
delinquency
status reports
and demographic
details
like name,
address,
unique identification
numbers
(passport
number,
National
ID) and
date of
birth.
Customer
Impact
It is your
responsibility
to keep
your account
current
and pay
your dues
on time,
to maintain
a fair credit
history
and enjoy
the benefits
of other
financial
products.
With a credit
rating agency
in place,
responsible
customers
can expect
faster and
more competitive
services
at better
terms. Any
defaults
would also
be recorded
and would
in turn
affect any
customer's
credit worthiness.
|
The content provided in this section
is for general information purposes only and does
not constitute financial advice or any other kind
of advice. You must obtain specific advice about your
specific circumstances from your own financial advisor
and/or other advisors. 