Is that possible to negotiate to change the monthly interest amount deduction?


#1

Hi ,

I am gonna to take a loan. But the bank guy has given that xx.xx% and also he has given the table like below

Ex. first month payment 10,960 – 1000 + 9960(Interest)
2 month payment 10,960 – less than 2k + 8k above (Interest)
3 month payment 10,960 – less than 2k+ 8k above (Interest)
4 month payment 10,960 – less than 2k+ 8k above (Interest)
5 month payment 10,960 – less than 2k+ 8k above (Interest)
6 month payment 10,960 – less than 2k+ 8k above (Interest)
7 month payment 10,960 – less than 2k+ 8k above (Interest)
8 month payment 10,960 – less than 2k+ 8 above (Interest)

Question :

I don’t want to pay more interest on first 1 year. is that possible to change ?


#2

Your interest is charged on the principal outstanding. Hence when you take loan and pay the first EMI, the interest is charged on the total amount of loan. As you pay your EMI, which includes part payment towards your interest and part payment towards your principal, your principal reduces which reduces your interest flow.

Since the EMI is fixed, lowering of interest component means your payment towards principal is increasing which further reduces your interest obligation.

For example, suppose you have taken 10 lakhs loan, your first EMI will calculate our interest on 10 lakhs. Suppose the first EMI is 20,000 out of which 15,000 is interest and 5,000 is principal, the next EMI will calculate interest portion on 9,95,000 (i.e. 10 lakhs – 5000).

So in my view, you cannot change it.


#3

very gud article