Loan Repayment Meaning

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 When someone avails any kind of credit, the borrower must pay back the amount within a specific time frame. If he fails to pay the borrower must be charged additional fees on top of the original amount. Based on the type of credit there are a variety of options for loan repayment.

However, non-payment or delays in the payment of loans shows inadequate debt management abilities that can place people in debt.


What is the meaning of loan repayment

The act of loan repayment is of paying back the loan amount that a lender has taken along with the amount of interest applicable. The repayment method typically includes a pre-planned procedure (called the loan repayment schedule) that is in the form of equated monthly installments , or EMIs. The installments contain principal and interest elements that must be due within a certain time.

Equivalent monthly installments have become among of the most sought-after ways to pay for loans. With this type of arrangement you can have the amount of loan paid in pre-determined installmentsthat comprise principal and interest components. The EMI installments are scheduled every monthly (loan timetable for repayment) on a specified date until the end of the loan term. At that point, the loan is paid back in total. But, be aware that EMI is not able to contain the same amount of interest and principal.

In the beginning period of the tenor EMI is a greater percentage of interest. Gradually, the percentage of interest is reduced while the principal component rises.

Loan Repayment Meaning in Hindi


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