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EMI Free Loan or Jumbo Loan?

A Personal loan is taken for multiple reasons such as home-renovation, paying off medical bills, big-ticket expenses like weddings [HT1] a dream vacation with loved ones. Instant personal loans are often opted for Debt consolidation – if one has outstanding dues from multiple credit cards or loans and desires to convert all of them into one loan.

Now imagine a situation wherein you are contemplating to take a personal loan and researching the best lenders for the same.

And right then, you receive a call from your bank in which you are a salary account holder and they commit you a fund transfer within a span of 15 minutes. What an irresistible offer that can be at the time of a financial need! You would be tempted to accept the offer, wouldn’t you?

While you are contemplating your decision of opting for that offers, here’s a little food for thought.

Lending with online lenders is building relationships with the borrower. A relationship, in which, not just the lender but borrower should also have some say in the decision.

Traditional clauses like prepayment charges, minimum period of 12 months before any prepayment can be done or even the fixed equated monthly instalments (EMIs), is beyond our understanding and does not seem customer friendly at all.

Many lenders come with Personal loan plans that give instant loans on credit cards without deducting present credit limits. The procedure is very simple. You say yes over the phone and you get all the money and traditional clauses that we just mentioned. A loan is granted on an existing card but the loan value is separate over and above existing credit card limit and separate billings are made for credit card and granted Jumbo loan amount. However, with instant approval comes instant clauses.

Revision of the principal amount is not done until the completion of tenure. Hence, rates might be less but the payable interest remains high though the principal amount is paid in parts during the loan tenure. This loan is simply granted on credit cards without submitting documents of any kind.

With EMI Free Loan, a personal loan with a unique benefit of interest only payments is available. The interest payment on a monthly basis reduces cash outflow up to 40% for the loan seeker. In addition, every time one makes a bullet payment towards the new principal outstanding (i.e. every sixth month) , the interest is re- calculated on the new reduced principal amount, thereby lowering instalment payment further. One can also pay a higher amount towards principal after 6 months of servicing interest only payment. Therefore, the decision of repayment lies in the hands of customers.

This helps in reducing the burden of high billings with deducted Principal amounts over time. This amount can be flexible but must be submitted every 6th month. This reduces the instalment cost and makes the loan product extremely favorable for the customers as against the fixed EMI based payments wherein the customer cannot pay back any extra amount towards principal.

With transparency and flexibility offered by EMI Free Loan, the customer is assured with healthy loan plans.

Customer convenience is always a priority. The foreclosure charges to be 0% after 6 months is the most important feature for a borrower since the risk of payment is decreased and you are free to break the tenure whenever needed. For high valued loans, this option is much safer and secured.