EMI Structure Guidelines

Why are EMIs initially loaded with interest components?

August 18, 2022 • 2765 views

Financial education helps you understand various financial jargons that might create confusion while approaching a lender or in general. A loan is an integral part of our life, you require a loan at various instances such as higher education, marriage, or any personal reasons. There are various types of loans that you get from banks and Non-banking Financial Companies (NBFCs). These banks and NBFCs are regulated by banks and the government. Depending upon the economic conditions of the country, factors such as interest rate increases or decreases according to the current economic situation.
When you approach for a loan, there are certain jargons you should be aware of:
•    Loan amount:  The term loan amount indicates the amount that you receive from a lender. The loan amount depends on factors such as your income and financial condition. For e.g., a person with a stable income and job and has good CIBIL score will be eligible for a high loan value. 
•    Interest rate: The interest rate is the rate charged on the borrowed amount by the lender.
•    Tenure: It is the time period decided by the lender and borrower for the repayment of the loan amount. 
E.g., A person who wants to loan of ?1 Lakh. He approaches a lender who offers a loan of ?1 Lakh for a tenure of 1 year at the interest of 10%. This means you have to pay interest of ?10,000 on the loan amount of ?1 Lakh. 
•    Loan amount: ?1 Lakh
•    Rate of Interest: 10%
•    Tenure: 1 Year

Another factor that influences your interest rate is type of interest.

There are two types of interest rates that be imposed on you as a borrower. Fixed interest rate – the rate of interest will be fixed as pre-decided between borrower and lender. Another type of interest is the floating interest rate – when the rate of interest changes as per the market rates. 
Along with the above-mentioned factors, pre-closure or partial payment also impacts your interest rate. When you make a partial payment, the overall loan amount decrease which results in a reduction in the amount on which the rate of interest is charged. 
Furthermore, you can avail of tax benefit as the Income Tax department provide you tax benefit on principal amount and interest.  You can avail of tax benefit of principal amount under section 80 C and interest is allowed under section 24. You can claim a maximum of ?1 Lakh under section 80 C.

How to calculate EMI with Poonawalla Fincorp?

You can apply for your EMI with Poonawalla Fincorp by following these below steps:
Step 1: Visit the official website of Poonawalla Fincorp 
Step 2: Insert loan amount that you wish to borrow
Step3: Insert the rate of interest offered by the lender
Step 4: Enter the tenure – loan duration in the tenure section 
Step 5: You will have your EMI auto calculated after entering all your details. 

To conclude

At Poonawalla Fincorp, you can avail different types of loan such as Personal Loan, Business Loan, Professional Loan, Auto Lease, Pre-owned Car Loan, Home Loan, and Medical Equipment Loan. With Poonawalla Fincorp, there are numerous benefits which includes quick approval, minimal documentations, no hidden charges, online application, competitive interest rates and many more. 



We take utmost care to provide information based on internal data and reliable sources. However, this article and associated web pages provide generic information for reference purposes only. Readers must make an informed decision by reviewing the products offered and the terms and conditions. Loan disbursal is at the sole discretion of Poonawalla Fincorp.
*Terms and Conditions apply

poonawalla fincorp team

Poonawalla Fincorp Team

Our team of expert writers and editors are passionate about providing authentic and valuable information on finance. Our aim is to simplify financial and finance-related concepts. We strive to help our readers become more aware and empowered to make informed financial decisions.

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