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What is the difference between a fixed EMI and a flexible EMI?

Curious about EMIs

What is the difference between a fixed EMI and a flexible EMI?

Fixed EMI (Equated Monthly Installment) and flexible EMI are two different approaches to repaying loans. Here's the difference between them:

1. Fixed EMI:
Consistent Payments: With a fixed EMI, your monthly installment remains the same throughout the entire loan tenure. This means you pay a fixed amount of principal and interest with each payment.
Predictability: Fixed EMIs provide predictability in your monthly budget because you know exactly how much you need to set aside for loan repayment each month.
Interest Payment: While the total EMI amount remains the same, the allocation of principal and interest changes over time. In the early months, a larger portion of the EMI goes toward paying interest, and the remaining amount is used to reduce the principal balance. As the loan progresses, a larger share of the EMI is directed toward the principal.

2. Flexible EMI:
Variable Payments: Flexible EMI, also known as stepup or stepdown EMIs, allows borrowers to adjust their monthly payments at different stages of the loan. Depending on the chosen plan, payments can either start low and increase gradually or start high and decrease over time.

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