In a regular personal loan, the EMI stays the same over the course of the loan. The EMI is calculated in a rather simple manner – principal + interest (over the tenure of the loan) / number of months.
For example, Royston takes a loan of Rs. 1 lakh for two years at 13% interest from a bank. In this case, Royston will be paying an EMI of Rs. 4,754 for 24 months. This EMI will remain the same during the 24 months. If Royston wants to part-prepay Rs. 50,000, he will have to bear the applicable part-prepayment charges.
A regular term loan does not account for the fact that there are times in a year when we have surplus money, which we can use to pay back a part of our loan and reduce the EMI.
We have introduced two new loan variants – Flexi Term Loan and Flexi Hybrid Loan that have been created to give you the flexibility of adjusting your EMIs based on your finances.
1. Flexi Hybrid Loan
Let’s take an example. Neha takes a Flexi Hybrid Loan of Rs. 1 lakh for two years. In the initial period, Neha will need to pay only the interest component as EMIs. Thus, for the initial period, her EMI burden is very low. Before the initial period gets over, Neha has the option to part-prepay Rs. 50,000 without any part-prepayment charges and continue to pay low EMIs. She also has the option to withdraw Rs. 50,000 after six months, if she wants to.
2. Flexi Term Loan
Neha can also choose our Flexi Term Loan that works like a regular term loan with the additional feature of making multiple part-prepayments or withdrawals from the sanctioned loan amount.
Three variants to choose from
Our personal loan has three variants – term loan, Flexi Hybrid Loan, and Flexi Term Loan – that have been explained in detail above. We have created an end-to-end online process wherein you can complete your application in less than 5 minutes and in most cases, the money will be transferred to your bank account in less than 24 hours*.
We have many people opting for this option every day across 365 days of the year. Using this to manage their personal finances well.
While choosing your lender, please make detailed calculations so that you are not drawn in just by the lower interest rate wherein, over the course of the loan you may actually be paying a far higher interest.
Here’s our calculator to help you
If you have an ongoing personal loan, you can easily switch to Bajaj Finserv. Here are a few simple steps:
For example, by now Royston has decided he wants switch from his bank to Bajaj Finserv Flexi Hybrid Loan and reduce his EMIs. He can apply for a loan of Rs. 2 lakh online in less than 5 minutes, get the money in his bank account in just 24 hours, and after a couple of days close his ongoing loan with his bank by paying Rs. 1 lakh or the remaining amount out of the Rs. 2 lakh Flexi Hybrid Loan.
By doing so, Royston has switched from principal + interest EMI to interest-only EMIs, thereby substantially reducing his EMI.
