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Introduction

A loan is a type of borrowing from one or more persons, associations or other institutions by other individuals, organisations, etc. The recipient incurs a mortgage and is generally obligated to pay interest on the loan before it is settled and to repay the principal amount borrowed. Loans are of many types, such as home loans, auto loans, personal loans, student loans, corporate loans, and many more.

A loan is a type of debt incurred by a person or by another party. The lender — usually a company, financial institution, or government — advances the borrower a sum of money. In return, the creditor commits to a series of terms, covering all financial costs, interests, maturity date, and other terms and conditions. In certain situations, the lender may often require collateral to protect the loan and assure its repayment.

Loan terms are agreed upon by each side before any money is lent. A debt may be backed by equity, such as a mortgage, or may be unsecured, such as a personal loan. Revolving loans or lines of credit can be lent, expended, and repaid, while fixed-rate, fixed-payment loans are fixed-term loans.

Common Types of Loans

Loans come in a number of different forms. There are a variety of aspects that can determine between the costs involved with them and their contract terms.

Secured vs. Unsecured Loan

Loans can be secured or unsecured. Mortgage and auto loans are secured loans, often backed or secured by collateral. In such situations, the equity is the asset on which the debt is taken out, so the mortgage collateral is the home, while the vehicle backs a car loan. Borrowers will be needed to provide additional sources of collateral on other types of secured loans, if applicable.

Credit cards and personal loans are unsecured loans. This indicates that they are not protected by any collateral. Unsecured loans typically have higher interest rates than secured loans, since the default risk is higher than secured loans. That's how the lender of the secured loan will recover the collateral if the borrower defaults. Rates tend to differ considerably on unsecured loans, depending on several factors.

Revolving Credit Vs Term Loan

Loans can also be defined as revolving or term. A revolving loan can be disbursed, utilized, repaid and utilised again, whereas a term loan applies to a loan paid in equivalent monthly instalments for a specified duration. A credit card is an unsecured, revolving loan, while a home loan is a secured, revolving loan. A car loan, on the other hand, is a secured, term loan, and a personal loan is an unsecured, term loan.

What is loan repayment?

Loan repayment is how the creditor returns the borrowed money back to the lender. The amount of the loan is returned in equivalent monthly instalments called the EMI, which consists of the interest component and the principal component.

The sum of the EMI, along with the interest and principal break-up, is given in a schedule called the Amortization Schedule. This table shows you the exact amount of interest and principal that is deducted from your loan amount for each EMI you pay.

What is an amortization schedule?

An Amortization Schedule is a table that shows each repayment instalment that is owed, normally on a monthly basis, and the amount of the instalment is assigned for the interest versus the principal. Amortization tables can enable a borrower to monitor what they owe and when the next instalment is expected, just as well work out the total outstanding principal or the interest on the loan.

Most Common Types of Loan Repayments

Loan repayments are usually rendered by monthly EMIs. Occasionally, there is also a possibility of a Bullet Repayment. Repayment plans are primarily dependent on the type of debt, the amount of the loan, the interest rate, the preferred term and the ability of the borrower to repay. Let 's look at the two most common forms of repayments available for various types of loans;

EMIs – EMIs or Equated Monthly Instalments are the most common form of payment plans offered for any form of loan. In this form of repayment, the principal value of the debt plus the total interest is split into equivalent monthly payments for the term of the loan. This sum is called the EMI and is payable per month by the creditor on a set date. As the number of EMIs continues to be paid, the interest rate and the principal amount will be reduced accordingly from the amount of the debt until the full amount of the loan is repaid. The loan is then officially ended.

With EMI repayments, consumers are better able to handle their monthly finances. They're also expected to prepare for other costs accordingly. Banks also offer 'Part prepayments' and 'Full pre-closures' on your loans, which allow you to use the bulk of the sum you may receive during the loan repayment period.

Bullet Repayment- Some loan products will help you to repay the loan via a bullet loan repayment mechanism. You just need to pay the interest portion each month in this option. When the term of this loan expires, you have to repay the whole principal loan in one go.

IndusInd Bank Loan Repayments

IndusInd Bank is a well-known financial institution offering a number of banking services in India. Loans are a primary part of their service portfolio. They offer a number of loans like home loans, vehicle loans, personal loans, gold loans, agri loans, loans against securities, loans against property, and many more.

Repaying loans of IndusInd Bank loans is convenient. Most loans are repaid via EMIs, that are auto-debited from your bank account. In case you want to make the payment on your own, you can use the Loan Repayment portal and pay via Netbanking or Debit Card.

IndusInd Bank Home Loan Repayment

IndusInd Bank offers home loans for purchase of new house, renovation of an existing house & top-up home loans.

  • Get home loans with tenures of up to 30 years. 
  • The loans are repaid via EMIs throughout the tenure of the loan. 
  • You can set up an eMandate using NPCI's secure and stable eNACH to schedule your EMI payments on pre - selected dates without any kind of interference.
  • You may also set up a standing instruction (SI) or opt for an electronic clearing service (ECS).
  • Make online payment through the IndusInd Bank website. From the home screen, click on the ‘Make Payments’ tab. Enter your Loan Account number and Mobile Number to register here. Upon successful registration, pay through your Netbanking or Debit Card.
  • Offline payment options are also available – you can remit cash or pay by check to any of the IndusInd Bank CFD branches around the country.
  • You are allowed to remit the funds necessary to the account and to request foreclosure of the loan account. Please note that this service is subject to relevant charges.

IndusInd Bank Vehicle Loan Repayment

IndusInd Bank provides fast and affordable funding choices for automobiles, ranging from two-wheelers, cars, commercial vehicles, earth movers to farm machinery.

  • Get loans up to 90% of the vehicle cost
  • Get repayment tenures of up to 5 years
  • You can set up an eMandate using NPCI's secure and stable eNACH to schedule your EMI payments on pre - selected dates without any kind of interference.
  • You may also set up a standing instruction (SI) or opt for an electronic clearing service (ECS).
  • Make online payment through the IndusInd Bank website. From the home screen, click on the ‘Make Payments’ tab. Enter your Loan Account number and Mobile Number to register here. Upon successful registration, pay through your Netbanking or Debit Card.
  • Offline payment options are also available – you can remit cash or pay by check to any of the IndusInd Bank branches around the country.
  • You are allowed to remit the funds necessary to the account and to request foreclosure of the loan account. Please note that this service is subject to relevant charges.

IndusInd Bank Personal Loan Repayments

IndusInd Bank Personal Loans are available for various needs like emergency medical expenses, home renovation, wedding, dream vacation, and many more.

  • Get personal loans of up to Rs.15 lakhs for various needs
  • Interest rate starting from just 11%
  • Flexible loan tenures ranging from 1 – 5 years.
  • Make online payment through the IndusInd Bank website. From the home screen, click on the ‘Make Payments’ tab. Enter your Loan Account number and Mobile Number to register here. Upon successful registration, pay through your Netbanking or Debit Card.
  • You can set up an eMandate using NPCI's secure and stable eNACH to schedule your EMI payments on pre - selected dates without any kind of interference.
  • You may also set up a standing instruction (SI) or opt for an electronic clearing service (ECS).
  • Offline payment options are also available – you can remit cash or pay by check to any of the IndusInd Bank branches around the country.
  • You can prepay / foreclose all outstanding loans at any time after paying 12 instalments for salaried customers and at any time after 6 instalments for self-employed customers. Prepayment charges as appropriate would be required to pay on the outstanding balance of the loan. The exact cost of the loan pre-closure can be found in the Foreclosure Letter issued by the bank. TAT (Turn Around Time) for the release of the Foreclosure Letter shall be 15 working days from the date of the request.

IndusInd Bank Gold Loan Repayments

IndusInd Bank Gold Loans is a wise way to finance your dreams by leveraging the worth of gold in your inventory.

  • Loan value of up to Rs. 10 lakhs
  • Immediate Loan to fulfil any immediate need that you might have.
  • Full guarantee of the safety of your gold. The gold is locked in your presence and vaulted in the bank's safekeeping.
  • In addition, if you are a client of IndusInd Bank, you can get better repayment options and reduced paperwork, making the loan process easier for you.
  • Bullet Repayments via monthly interest payment and repayment of principal on maturity date
  • Equated Monthly Instalment option (EMIs) also available
  • You may make a part-payment, but the ornaments will be given back only after the full remaining sum has been paid.

How to use the IndusInd Bank EMI calculator?

IndusInd Bank EMI calculator can be found on the loan product page. It is prudent to utilize this EMI calculator to ensure that you can afford the loan repayments comfortably.

Here is how you use the EMI Calculators on the IndusInd Bank website:

Most EMI calculators have 3 major components; the loan amount, the repayment tenure, and the rate of interest.

You can enter variable values in these 3 fields, and the screen will display the corresponding EMI amount (monthly), the total interest repayable and the total amount payable.

CreditMantri Repayment Calculator

The CreditMantri website has EMI calculators for different types of loans. You can find them through this path – Home > Community > Finance Calculators.

Once you have chosen the desired calculator, you can enter different values in the loan amount, loan tenure and Rate of Interest fields to calculate the respective EMI amount (monthly), total interest payable and the total repayment amount.

This will give you a clear idea if you can afford the loan. If needed, you can pool in additional down payment or submit additional security or collateral to get better loan terms.

FAQs

1. What should I do after paying the last EMI?

Once all the EMIs have been paid, the Bank shall issue a computerised letter of closure protected with a hologram, Form 35 and No Objection Certificate (No Objection Certificate) to the Road Transportation Office (RTO), which will be withdrawn from the Registration Certificate (RC) book by the Bank. A similar NOC shall also be given to the insurance provider to delete the relation from the contract, if necessary, within 6 days from the date of payment of the last EMI. Please notice that Form 35 is valid for a term of three months from the date of issue. Any security post-dated checks (PDCs) issued during processing will also be returned.

2. What happens if my ECS / NACH / cheque is rejected / returned or if I don't pay EMIs on time?

Dishonouring a check / ECS / NACH is a criminal offence which can be subject to fines under the applicable provisions of the legislation. You may be listed as a defaulter for not paying the EMIs on time. You will have to pay a penalty initially. If, despite repeated reminders, you refuse to regularise your payments, the Bank can legally reclaim your vehicle or property. In comparison, your credit ratings would also be negatively impacted, which will hinder the chances of obtaining a loan in the future. In addition, you will still have to pay a bounce fee on the return of the instrument. Please refer to our Schedule of Charges for the sum of this fee.

3. Is part- prepayment of a personal loan allowed?

The prepayment part is not permitted. The personal loan must either be prepaid in full or serviced for the term of the deal.

4. How can I change my loan repayment method?

If you want to change the payment form or bank account for your loan repayment, please visit your nearest bank branch and send your request with an updated mandate for a nominal fee. Please notice that it usually takes 25 working days to enable the updated instructions. In the event that your next repayment is due prior to this date, instructions that have already been deposited with us will be sent for payment.

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