It is empowering to have quick access to credit when needed. Anybody's life can be greatly improved by getting money quickly to satisfy immediate financial needs and repay it in manageable amounts over time.
An equated monthly installment, also known as an EMI, can help you to have simple access to credit when you have a significant credit debt but a modest monthly budget. You can then return your loan over time in tiny amounts. However, the amount of interest you must pay increases with the length of the repayment period. However, if you have extra cash on hand, you can choose the advanced EMI payment option to lessen the strain of repayment greatly. There are typically two ways to repay EMIs: regular EMI payments and advance EMI payments.
What is a Regular EMI Payment?
The most popular EMI option is the regular EMI payment, in which the borrower makes monthly payments over the loan length or payback tenure. The main loan amount is credited to the borrower's account, and repayment doesn't start until then. The equal monthly installment component of the regular EMI payment option comprises both the principal and interest amount. Throughout the designated repayment period, the EMI is unchanged.
What is an Advance EMI Payment?
The option for paying EMIs in advance is available to borrowers who have extra money available to them. These days, numerous reputable banks and NBFCs provide this kind of credit. If you choose the advance EMI payment option, your repayment bank account won't be debited for monthly EMIs for the corresponding period. In addition, you should know that paying an advance EMI won't impact the loan's interest rate because the amortization schedule will remain the same.
5 Benefits of Choosing Advance EMI Payment
1. Most financial lenders offer a simple, hassle-free method for paying your advance EMI.
2. You can evaluate the advantages of several EMI alternatives on the websites of banks or NBFCs to find the best one for you.
3. You can pay your advance EMI using your favorite payment methods, such as UPI, net banking, or a debit card.
4. Online loan applications with advanced EMI payment options are available. Nowadays, most banks have fully eliminated paper from the loan application procedure. Therefore, you can ease the strain of making monthly EMI repayments by choosing an advance EMI payment option.
5. You can make an early EMI payment because you can access extra money. The more interest you pay your lender, the longer the loan tenure. You can shorten the length of your loan by making your EMI payments in advance.
Conclusion
As a consumer, you can either make an advance payment on your EMI or refund your EMI via a standard way. However, only choose the advanced EMI payment option if you have enough extra money to pay an advance EMI when choosing between the two options. Examine your income-to-expense ratio before choosing, then select the appropriate repayment strategy. CRED has provided a simple and free EMI calculator to assist you with the EMI repayment computation. You can choose the EMI amount, loan term, and interest rate to get the payment breakdown component, which includes the principal and interest amount.