What does a bounce charge signify?
A bounce charge, sometimes known as an EMI bounce charge, is imposed when a borrower's EMI payment fails, often due to insufficient funds or other reasons. A fee is imposed for such occurrences.
What is a reducing Personal Loan Interest Rate?
A reducing personal interest rate, often utilized for personal loans, is computed based on the remaining loan balance after each EMI payment. As borrowers continue making repayments, the interest is applied to the decreasing principal amount, leading to reduced interest payments over time.
What factors influence personal interest rates?
Personal loan interest rates are influenced by several factors, including one's credit score, income stability, employment history, loan amount, and the lending institution's policies. A robust credit profile and a steady income typically result in a more favorable unsecured loan interest rate.
How are prepayment charges determined?
Prepayment charges are computed as a percentage of the outstanding loan amount being prepaid. The specific calculation may differ depending on the lender's policies and the terms outlined in the loan agreement.