How do I benefit if the interest is calculated on a daily/monthly reducing balance?

1 ANSWERS

1. Guest22773965
   

   On an annual reducing balance method, you will continue to pay interest on amounts you repay during the coming one year as the interest for the year is determined on the basis of the balance outstanding at the beginning of the year. In the case of the daily/monthly reducing balance, which is the methodology we employ, your interest is calculated only on the outstanding loan amount, which reduces every time you pay off your EMIs or make any prepayments. This in essence lowers your effective rate of interest significantly.

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