What is Rate of Interest and It's types?

WHEN YOU REQUIRED MONEY IN NEED AND ASK FOR LOAN, LOTS OF PROBLEMS ARISE LIKE…

1. LOAN REJECTION ON FIRST STAGE: Due to lack of knowledge always arise discrepancy between your eligibility and bankers demand, it may you have submitted improper documents. Your job/company, business, age, your income, educational related documents & qualifications may not fit in bankers terms and conditions. In opposite side it may be possible that bankers unable to verify/asses your details at PD or other TPC process, so this may not successful and your application get rejected.

2. PROCESSING FEES REFUND ISSUES: Almost all bank and NBFC charge upfront processing fees, and it's not refundable, your loan has been rejected,you know it's too late, reason is same mentioned above. It's all can be avoided by proper guidance.

3.  RATE OF INTEREST(ROI) :  Interest rate is the amount of interest due per period, as a proportion of amount lent, deposited or borrowed.

There are following types of interest rate:

I. FLAT RATE OF INTEREST: Flat rate of interest is the type of interest that will stays the same on the principal loan amount throughout your loan tenure...means whatever interest rate you are charged at the beginning of the loan payment will remain the exact same figures as your final month’s repayment. 

For example..you are taking a loan of Rs.5,00,000 on 10% flat rate of interest for 7 years then what will be your flat ROI per installment lets calculate (Rs. 500000*7*10%)/84=Rs. 4167

Please note that it is just interest per instalment, no matter how much you have paid on your principal loan amount.ie.Rs. 5952(per month principal)+Rs.4167(per month interest)=10119 (84 EMI)

II. REDUCING RATE OF INTEREST: Reducing rate of interest is the interest calculated on balance outstanding principal loan amount every month. It means you pay interest on balance principal amount of loan, your amount of interest decrease with decreasing in your principal. 

III. FLOATING RATE OF INTEREST: Floating rate of interest is the rate of interest varies according to market scenario. EMI can change on floating rate change, its some time favourable(when market rate decrease) and some time not(when market rate increase), After every EMI payment, outstanding loan amount get reduced and next month interest calculated on only outstanding loan amount.

IV. FIXED RATE OF INTEREST: Fixed rate of interest is the interest which is fixed throughout tenure whether market up or down,  it’s calculated on the full principal amount of the loan throughout its tenure without considering the monthly EMI made.

4.TENURE:  Borrowers mostly wish to go for long term loans because the EMI is lower and they enjoy tax benefit on the loan. But this is a wrong  strategy because they end up paying a huge interest on the loan.

 According to economic times "Long tenure is big burden of interest on customer .....suppose If you take a loan of Rs. 500000 at 9.% for 10 years, the interest will be Rs.260051/- . And if the tenure is 15 years then interest will be Rs.412837/- for a 20-year loan interest will be Rs. 579668/. In 25 years, the interest will be Rs.758791/- is 152% of the principal...short tenure is always best option.

AND MANY MORE THING LIKE  REASON OF REQUIREMENT PRESENTATION, KYC, INCOME DOCUMENTS, BUSINESS STABILITY Or  JOB VINTAGE, INCOME DOCUMENTS, PROPERTY DOCUMENTS, PREVIOUS LOAN HISTORY WHICH AFFECTED CIBIL FOR LOAN APPLICATION TO DISBURSEMENT EACH PROCESS DEPEND KNOWLEDGE, EXPERIENCE, DOCUMENT PRESENTATION…..  etc are the points/steps where help required by educating, quiding and support that's my vision & mission.ब्याज दर और प्रकार(Rate of interest and it's types)