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Introduction

In this guide, you can find all that you need to know about SBI loan repayments - how it works, how to pay the borrowed amount, amortisation schedule, terms and conditions and much more.

A loan is any money borrowed by an individual or another party. The lender — usually a company, financial institution, or government — provides the borrower with a sum of money. In return, the borrower agrees to a series of terms covering all financial costs, interest, maturity dates and other terms and conditions. In certain situations, the lender may often require collateral to protect the loan and ensure its repayment.

Loan terms are concurred by each party before any amount is lent. A debt may be backed by equity, such as a mortgage, or it may be unsecured, such as a personal loan. Revolving loans or lines of credit can be lent, spent and repaid, while fixed-rate, fixed-payment loans are fixed-term loans.

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

What is loan repayment?

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

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

What is an amortization schedule?

The Amortization Schedule is a table showing each instalment that is due, normally on a monthly basis, and the amount of the instalment is assigned to the interest as opposed to the principle. Amortization tables may allow the borrower to monitor what they owe and when the next instalment is expected, as well as to work out the total outstanding principal or 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.

SBI Loans – Repayment, Features and Benefits

SBI Bank Home Loan Repayment

  • SBI Bank offers many different types of home loans to eligible customers. 
  • Get home loans up to 80% of the property value.
  • Repay the loan in tenures ranging up to 30 years.
  • Set up NACH mandate to enable auto debit of the EMI amount from your bank account.
  • Make payments into your loan account via your own SBI savings account or other bank accounts using Netbanking facility.
  • Pay offline at any bank branch using cash or cheques.
  • Pre-closure of loan with no penalty charges.
  • Part prepayment of loans available on select products.
  • Pre-EMI offers available on select products and properties. 

SBI Bank Personal Loan Repayment

  • SBI Bank offers Personal Loans to different customer segments based on the needs, and their income.
  • Get repayment tenures ranging from 12 months to 5 years.
  • The loan is payable in Equated Monthly Payments over the term of the loan or in Lump sum at the end of the term depending on the product. The payment instalment shall begin from the date stated in the letter of sanction. Obligation to the bank would be terminated only if the full amount in the loan account becomes Zero, if any, on payment of the residual amount.
  • Drop-off cheque facilities or Post Dated Cheques are also accepted.
  • You can also set up an SI from your salary/ pension a/c with the Bank. 
  • No pre-payment/ pre-closure charges shall be levied, except for Rent Plus, where 1% of the loan amount prepaid will be charged as prepayment penalty.
  • A penalty of Rs. 250/-will be levied for any bounced check / ECS or SI dishonor. The charges can vary from time to time. In the case of a check bounce, civil proceedings under section 138 of the Negotiable Instruments Act, 1881 will be launched.

SBI Bank Auto Loan Repayment

SBI Auto Loans can be utilized to purchase new or used cars, multi-utility vehicles and SUVs.

  • Get up to 85% of the vehicles on road price as loan amount.
  • Repayment tenures of up to 84 months.
  • Available repayment options include NACH Mandate, ECS or PDC cheques
  • The date of payment to be set for the next month to coincide with the day on which the primary income flow of the borrower occurs.  Where NACH is accessible, the Bank can utilize paperless auto debit options.
  • A penalty of Rs. 250 + GST is levied for every bounced cheque/NACH or SI dishonors. The rate is bound to change from time to time.
  • Charges @1% on part payment amount (plus GST) will be levied quarterly on Fixed Interest rate car loans, if you opt to make part prepayments within 24 months from the date of disbursement.
  • In case of foreclosures within 24 months of loan disbursement, a charge of 3% of the closure amount (plus GST) is levied.

SBI Bank Education Loan Repayment

SBI Bank Education Loans offer affordable loans for all your higher education needs. They offer one of the best interest rates in the market.

  • You can get a repayment period of up to 15 years, after completing the course, along with a 12-month repayment holiday.
  • There are no processing charges for loans up to Rs. 20 lakhs.
  • Repayment will commence only after one year of course completion.
  • You can also avail a second loan on top of the existing loan and extend the repayment by another 15 years of completing the second course.
  • The EMI amount is calculated by including the accrued interest during the moratorium period and course period along with the principal.
  • You can opt to pay the interest component during the moratorium period to reduce the burden of EMI that commences after the course completion.
  • There are no penalties for prepayment. 

SBI Bank Gold Loan Repayment

SBI Bank offers gold loans of up to Rs.50 lakhs to meet all your needs. 

  • You can get up to 75% of the gold value as the loan amount.
  • Get repayment tenures of up to 36 months to close your gold loan
  • Offers 3 different repayment modes.
  • Gold Loan: The repayment of principal and interest commences the month following the month of loan disbursal.
  • Liquid Gold Loan: This is an Overdraft Account with transaction facility and requires the monthly interest to be served.
  • Bullet Repayment Gold Loan: Interest and the principal amount to be repaid on or before the term of the loan or on the date of closure of account.

SBI Bank Loans Repayment Calculators

Repayment calculators are an important tool you should utilize before opting a loan. Repayment calculators allow you to plan the loan amount and EMI schedule wisely.

SBI website offers quite a few types of calculators for your benefit; 

  • Repayment Calculator (where interest is paid during the moratorium period): This calculator allows you to calculate the EMI you have to bear if you are willing to pay the interest component during the moratorium period.
  • Repayment Calculator (where interest is not paid during the moratorium period): If you opt to not pay the interest component during the moratorium period, this calculator lets you determine the EMI amount you have to bear once the repayments start.
  • EMI Calculator: This is the common EMI calculator that allows you to enter different values for the loan amount, the repayment tenure, and the rate of interest. The screen will then display the corresponding EMI amount (monthly), the total interest repayable and the total amount payable.
  • Prepayment Calculator: This is a useful calculator that allows you to decide if it is prudent to pre-close a loan at this point of time. You can use it to find out the benefit of part prepayments or full closures.

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 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.

2. 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.

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 is Pre-EMI?

Under the Pre-EMI option, the creditor is only expected to pay interest on the balance of the loan to be paid as a result of progress in the completion of the building. The actual payment of the EMI shall begin after the possession of the property.

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