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Introduction

Loans serve as ultimate financial aids in times of need. Today, we can take loans for almost anything; starting from personal loans, vehicle loans, home loans, education loans, to business loans, one can find a suitable product for all their needs. These days, banks and NBFCs are offering competitive loan products to attract consumers. Loans are processed and disbursed in as less as 48 hours to put the much needed funds in the consumers’ hands.

The loan process may have become much quicker and hassle-free these days, but there are many fine prints to be noted while availing a loan to avoid becoming a victim of ignorance. An important feature of any loan is the ‘Repayment’. One has to be prudent with the entire repayment process to reap the highest benefits out of their loan.

There are different repayment options based on your loan product, loan amount and your repayment capacity. It is important to design your loan repayment based on these factors for comfortable repayment. Because, defaulting on loan repayments has many adverse effects on your financial credibility; for one, it will affect your credit score, and secondly, it will put a negative remark on you for future loans. So, it is of paramount importance to choose a loan product that will allow for comfortable repayment based on your salary, age and other assets.

What is a Loan?

A loan is the money you borrow from a bank or financial institution with a promise or commitment to repay the principal amount with interest. Lenders charge you interest on this loan amount to offset the possible risk they are taking by lending you money. Common types of loans people avail in India are home loans, car loans, personal loans, education loans, business loans, gold loans, etc.

What is loan repayment?

Loan repayment is how the borrower pays back the borrowed money to the lender. The loan amount is repaid in equated monthly instalments called the EMI, which is made up of the interest component and the principal component.

The EMI amount, along with the interest and principal breakup are given in a schedule called the Amortization Schedule. This table gives you the exact amount of interest and principal that is deducted from your loan amount with every 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 generally done through monthly EMIs. Occasionally, there is the option for Bullet Repayments too. Repayments options are largely based on the type of loan, loan amount, interest rates, chosen tenure and the repayment capability of the borrower. Let’s have a look at the two most common types of repayments available for different types of loans;

  • EMIs – EMIs or Equated Monthly Instalments are the most common type of repayment option available for any type of loan. In this repayment type, the total sum of loan amount plus the total interest is divided into equal monthly instalments of the loan tenure. This amount is called the EMI, and is paid by the borrower on a fixed date every month. As the number of EMIs keep getting paid, the interest amount and the principal amount are reduced from the loan amount correspondingly, until the entire loan amount is repaid. The loan is then closed.
  • With EMI repayments, customers are able to manage their monthly finances better. They are able to plan ahead for other expenses too. Banks even allow ‘Part prepayments’ and ‘Full Pre-closures’ on your loans, that allow you to utilize any bulk amount you may come into, during the course of loan repayment.
  • Bullet Repayment - Some loan products would allow you to repay the loan via bullet loan repayment process. In this option, you need to pay just the interest portion per month. When the tenure of this loan expires, you have to repay the whole principal loan in one shot.

Kotak Mahindra Home Loan Repayments

Kotak Mahindra Bank offers home loans, of up to 90% of the property value, to eligible customers. With the rate of interest coming down phenomenally during the past year, home buyers everywhere are rejoicing.

  • Home loans at Kotak Mahindra Bank are repaid through EMIs. 
  • A total tenure of 20 years is offered to repay your home loan. 
  • Monthly EMIs are paid via NACH mandate, that allows automatic debit of the EMI amount from your bank account.
  • Kotak Mahindra Bank allows prepayment or foreclosure of your home loan at no extra cost.

Kotak Mahindra Car Loan Repayments

Kotak Mahindra Bank funds the purchaser of most commercial cars and vehicles manufactured by the leading companies in India. You can also get funds for vehicles that are imported.

  • One can get a minimum loan amount of Rs. 75,000, up to 90% of the car value. 
  • The loan amount can be repaid in EMIs of 12 – 84 months. 
  • The borrower has the option to prepay the loan upon completing 6 EMI payments. 
  • Monthly EMIs are paid via NACH mandate or ECS instructions, that allows automatic debit of the EMI amount from your bank account.
  • In case you miss an EMI, you can make payment by logging into your Kotak Mahindra Bank Netbanking account.

Kotak Mahindra Personal Loan Repayments

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

  • Avail personal loans of up to Rs.20 lakhs at attractive interest rates
  • Repayment tenure ranging from 1 to 5 years
  • Convenient, hassle-free, online application process
  • Part prepayment facility to reduce your interest burden
  • Various modes of repayment available - Standing instructions on your Kotak Bank’s savings/salary account, post-dated cheques, or NACH mandate that allows automatic debit of the EMI amount from your non-Kotak bank account.

Kotak Mahindra Gold Loan Repayments

Kotak Mahindra Bank offers gold loans of up to Rs.50 lakhs to eligible customers. They offer hassle-free and instant gold loans.

  • Customers can get gold loans starting from Rs. 20,000 up to Rs.50 lakhs. 
  • A repayment tenure of 12 months is given initially, which can be extended for 24 months more, as per borrower requirement.
  • The loan is available for both customers and non-customers of the bank. 
  • Repayments can be made via EMI facility, for a total of 48 months’ tenure. 
  • Top-up loan facility available for EMI loan type. 
  • Bullet repayment scheme available for loan tenures of 12 months. These loans can be renewed for another 24 months with the same sanction letter and documents.
  • Term loans can be availed with EMI repayment facilities for tenures of 24 & 36 months only. Post-dated cheques should be submitted for this mode of repayment.

Kotak Mahindra Bank Loan Against Property Repayments

Kotak Mahindra Bank offers loans against different types of properties, viz; commercial, residential or industrial. This loan can be utilized for both your personal and business needs.

  • Loan values from Rs.10 lakhs up to Rs.5 crores
  • Flexible loan options under EMI based Term Loans as well as Overdraft facility
  • Convenient repayment options
  • Repayments are done via monthly EMIs

Kotak Mahindra Bank PayDay Loan Repayments

This is a revolutionary loan product from the bank. This is a single instalment, short term loan, that can be availed with a few clicks online. This is an instant disbursement loan.

  • The loan amount, along with the interest, is deducted from the customer’s bank account the very next month of loan disbursal. For example, if a customer borrows Rs 10,000 on the 15th of November 2020, and the repayment date is set as 5th December 2020, the tenure for this loan will be 20 days. The total outstanding will be deducted from the customer’s bank account on the 5th of December and the loan is closed.
  • No need to produce any guarantee or security
  • Maximum of Rs.1.5 lakhs can be availed as loan
  • The full loan balance is deducted from your Kotak Savings account on the repayment date.
  • On the maturity date, lien(hold) is labelled on your bank balance, for the loan amount, provided, the sum is available in the account. Once the entire payment is deducted, the lien is withdrawn immediately. If there is insufficient balance, the lien(hold) account will be on the amount due until it is retrieved.
  • Penalty charges at 2% per month on the total amount due in case of late payments.
  • You can make payment through Netbanking, debit card or UPI once past the due date.

How to use the Kotak Mahindra Bank EMI calculator?

Kotak Mahindra Bank has a comprehensive EMI calculator for the different kinds of loans they offer. 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 Kotak Mahindra Bank portal:

  • 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.

Kotak Mahindra Bank Loan Repayments FAQs

1. What is the most common form of loan repayment in India?

In India, most loan products offer the ‘EMI repayment’ method. This EMI amount is generally auto-debited from your bank account with the same bank or different bank. These days, a NACH mandate facilitates the auto deduction of the EMI amount from your bank account.

2. What happens if the auto-debit on your bank account bounces?

In case of insufficient balance in your bank account, or due to any other issues, the auto-debit may get rejected or bounce. In these cases, you will be immediately informed about the same and given the option to make the EMI payment, with applicable penalties, at the bank branch or on their website.

3. What is pre-payment and partial payment of loans?

Though loans are repaid with monthly EMIs, banks allow you to make occasional additional payments into your loan account that will be adjusted against the principal amount. One can make a partial prepayment or make a full prepayment and foreclose the loan. Though there are no charges for prepayments these days, one should check with the bank for any applicable charges.

4. What are the options available other than EMIs to pay a loan?

Though EMI is the most common form of loan payment, some banks allow you to make loan payments via debit card, Netbanking, UPIs, or at the branch.

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