Loan High Rate of Interest
Dineshchandra Singh
(Querist) 25 May 2011
This query is : Resolved
Sir,
I have taken a personal loan of Rs. 3,25,000 from citifinancial 18 months back. We agreed about the EMI tenures for 36 months and I had paid the EMI upto 18 months. But I received a call from their customer care that 48 EMIs are remaining. I was surprised on hearing this and check the loan agreement that I had already signed by me. Then I came to know that 48 months is written in the document. I went to their office branch and requested that this will be a printing mistake, but they didn't agree with that and shown me the total payable is about 5,50,000. Though I didn't agree with them, I am helpless. Could you please guide me what needs to be done from my end? Is there any legal approach to solve this? As their interest is almost 100% which is very near to twice the loan amount. Please help.
Hoping to get a suitable advice soon.
Thanks,
Dineshchandra Singh
R.Ramachandran
(Expert) 25 May 2011
Please tell what is the rate of interest agreed and what is the EMI being paid by you. First you should understand that from the EMIs that you pay, first the interest portion will be adjusted and only the balance will get adjusted against the principal loan amount. Initially the repayment of principal amount will be very less. But later on the interest portion will be less and repayment of principal amount by you would be more.
First the bank will work out the interest on month to month basis on the outstanding loan amount and add to your loan account. From out of the EMI payments made by you, they will first adjust the interest portion and only the remaining amount towards repayment of original loan amount.
Arun Bhatia
(Expert) 25 May 2011
Sir,
Please tell me the date of disbursement of Loan and the rate of interest agreed and the amount of instalement
malipeddi jaggarao
(Expert) 25 May 2011
The following particulars are required:
a) Principal Amount
b) Rate of Interest
c) Date of availing the loan
d) Dates of repayments
Please note that Banks do charge interest on monthly compounding basis, wherein the interest will be added to the principal. You can obtain a statement of loan account and calculate interest on your own which will give a clear picture.
Guest
(Expert) 26 May 2011
No scope in view of the period mentioned at the agreement and signed by you at each page.
In fact these financial institutions don't tell the applicant about their system of charging interest. Whatever rate of interest they intimate it costs nearing about double the rate. They make installments in such a way that maximum amount of EMI goes to the head interest and the caapital is reduced to the barest minimum so that the interest may continue to be worked out on that principal amount. If you ask for the statement of up to date payments, as split up in to the capital and interest, you can find that out of every EMI maximum amount would have been shown as interest amount.
So, you will have to bear it till the end of the EMI' or pay the balance amount of capital in lump sum somehow or the other well before the maturity period. However, the intitution may charge some penalty amount for premature closure of loan account. So, before doing so, must check with them how to clear the loan in lump sum and what you would have to pay.
