Decoding Repayment Tenure: Making Sense of Your EMI Duration

Repayment tenure refers to the time period allotted to a borrower to repay the principal amount and interest on a loan. The repayment tenure can vary depending on the type of loan you have taken, the amount borrowed, and the terms and conditions of the lender. The repayment tenure meaning is essentially the amount of time you will be paying back your loan.

 

One of the most common loans that people take is a personal loan. Personal loans typically have a repayment tenure that ranges from 1 to 5 years. The repayment tenure for a personal loan can be shorter depending on the lender’s terms and your creditworthiness. Shorter repayment tenure can mean higher EMIs (Equated Monthly Installments). On the other hand, a longer repayment tenure can mean smaller EMIs.

 

Making sense of your EMI duration is essential to understand the amount you are going to be paying monthly. The EMI is the amount you will have to pay each month in order to repay the loan. It is calculated by taking into account the principal amount, the interest rate, and the repayment tenure.

 

Before discussing further repayment tenure and how the Bajaj EMI card works, let us first understand EMIs.

 

What are EMIs?

 

EMI stands for Equated Monthly Installments. EMIs are the monthly installments that borrowers need to pay towards a loan. It is a combination of principal and interest. In other words, an EMI payment includes the repayment of a portion of the principal amount as well as the interest charged on the outstanding loan balance.

 

How is EMI calculated?

 

To calculate EMI, you need to know the principal amount, the interest rate, and the repayment tenure. The EMI calculation formula is:

 

EMI = [P x R x (1+R)^N]/[(1+R)^N-1]

 

Where:

 

P = principal amount

R = interest rate per month

N = repayment tenure in months

 

Let us illustrate the calculation of EMI with an example. If you take a personal loan of INR 1,00,000 at an interest rate of 10% per annum for a repayment tenure of 3 years, the EMI calculation will be as follows:

 

EMI = [1,00,000 x 0.0083 x (1+0.0083)^36]/[(1+0.0083)^36-1]

 

EMI = INR 3227

 

Therefore, your EMI for a INR 1,00,000 loan at an interest rate of 10% per annum for a repayment tenure of 3 years will be INR 3227 per month.

 

Now that you understand what EMI is and how it is calculated, let us move on to repayment tenure.

 

What is Repayment Tenure?

 

Repayment tenure refers to the time period allotted to a borrower to repay the principal amount and interest on a loan. During the repayment tenure, the borrower needs to make regular EMI payments. The repayment tenure can vary depending on the type of loan, the amount borrowed, and the terms and conditions of the lender.

 

Repayment tenure is an important aspect to consider while taking a loan. It determines the amount of EMI you will have to pay each month. A shorter repayment tenure means higher EMIs, whereas a longer repayment tenure means smaller EMIs. The choice of repayment tenure depends on your financial situation, income, and expenses.

 

How Bajaj EMI Card Works?

 

Bajaj EMI card is a digital payment card that allows you to make purchases on EMI without any interest. It is offered by Bajaj Finserv, a leading non-banking financial company in India. The Bajaj EMI card works on the principle of no-cost EMI, which means that you don’t have to pay any interest on your purchases.

 

Here’s how Bajaj EMI card works

 

Apply for Bajaj EMI Card

 

To apply for the Bajaj EMI card, you need to fill an online application form on the Bajaj Finserv website. Once your application is approved, you will receive a virtual card on your registered mobile number.

 

Shop on No-Cost EMI

 

With your Bajaj EMI card, you can shop on no-cost EMI at any partner store. You can also use your Bajaj EMI card to shop online on e-commerce websites.

 

Choose your Repayment Tenure

 

While making a purchase on no-cost EMI, you can choose your repayment tenure depending on your financial situation. The repayment tenure can vary from 3 to 24 months depending on the partner store.

 

Make EMI Payments

 

Once you have chosen your repayment tenure, you need to make EMI payments every month. The EMI payment will be deducted from your bank account on the due date. The amount of EMI payment will depend on the purchase amount and the repayment tenure.

 

Conclusion

 

Understanding repayment tenure is essential to make wise financial decisions. It determines the amount of EMI you will have to pay each month. A longer repayment tenure may result in smaller EMI payments, but it also means that you will be paying more interest over the loan’s duration. On the other hand, a shorter repayment tenure will result in higher EMI payments but may help you save on interest.

 

The Bajaj EMI card is an excellent digital payment card for making no-cost EMI purchases. It allows you to choose your repayment tenure depending on your financial situation and helps you make purchases without any interest. Whether you choose a loan or opt for the Bajaj EMI card, understanding the repayment tenure and EMI payments will help you make informed financial decisions.

Also Read: Zero Down Payment Plans: Making Big Purchases More Accessible

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