Which banks Provide Reducing Principal Can Loan

[pradeepG]

Which all banks Provide Reducing Principal Can Loan
where principal amount reduced upon time (not talking for repo rate +- concept)

 

[NShah]

Reducing principal ? How this works ?
For knowledge purpose

 

[pradeepG]

Reducing principal ? How this works ?
For knowledge purpose

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.

 

[NShah]

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.

So we can call it fixed rate of interest ?

 

[pradeepG]

So we can call it fixed rate of interest ?

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

 

[bsc0008]

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.

 

[pradeepG]

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.

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...

 

[bsc0008]

I'm not sure on that part. I didn't ask specifically for this kind of calculation and I just asked for fixed rate.
But in the below official SBI link, it's given as Daily reducing balance.
https://www.sbi.co.in/web/personal-banking/loans/auto-loans/sbi-new-car-loan-scheme

 

[pradeepG]

I'm not sure on that part. I didn't ask specifically for this kind of calculation and I just asked for fixed rate.
But in the below official SBI link, it's given as Daily reducing balance.
https://www.sbi.co.in/web/personal-banking/loans/auto-loans/sbi-new-car-loan-scheme

many thanks. that helped a lot. do you know of any other bank?

 

[pradeepG]

I'm not sure on that part. I didn't ask specifically for this kind of calculation and I just asked for fixed rate.
But in the below official SBI link, it's given as Daily reducing balance.
https://www.sbi.co.in/web/personal-banking/loans/auto-loans/sbi-new-car-loan-scheme

seems like BOB also gives same