Loan term

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Loan term

Loan Term is the period over which a loan agreement is in force, and before or at the end of which the loan should either be repaid or renegotiated for another term. 

The loan term differs when you regenerate an EMI based on the Loan Contract Amount or the Disbursed Amount.

Note:

The maximum permissible principal and Interest (P+I) EMIs must always be less than or equal to the term defined on a loan.

For example: 

The number of terms defined in the contract is 12.

  • If you choose to regenerate the EMI on the Loan Contract Amount, then the interest is calculated only on the Disbursed amount and the principal will be calculated on the loan contract amount. Due to which, the number of payment terms are reduced to 6 which is less than the defined loan term.
  • If you choose to regenerate the EMI on the Disbursed Amount, then the principal and interest both are calculated only on the disbursed amount. Due to which, the number of payment terms displayed are 12 which is equal to the defined loan term.