We inquire about the interest rate, processing cost, documentation fee, and other fees when we register for a personal loan. You as a candidate for a personal loan must always verify the EMI to better organise your finances. However, the majority of current and future borrowers of personal loans are not aware of a certain fee that they must pay. So keep reading to know what is BPI in LIC home loan.
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The interval of time between the moment a personal loan is disbursed and when the first EMI payment is due is an example of a broken period. In the form of broken period interest, banks assess interest on the split interval. One personal loan's EMI must be deducted on the 5th of each month. Let's assume that the loan was disbursed on February 1st, meaning that you would have to pay interest for the 5 days from February 1st to February 5th on February 5th. On your overall loan expenses, the interest you paid on February 5th is not included. Your monthly EMI deduction will begin on March 5th. In this method, the payment you made on February 5 was not taken into account for calculating your loan payback.
Why is understanding the Broken Period Interest important?
Banks may purposefully delay the loan's distribution in order to profit more from the broken period interest rate. Because the majority of borrowers are unaware of it. Let's look back to the previous example to see how you could be fooled by lenders.
The borrower in the first case paid interest for five days after the loan was delivered on February 1st. If the bank extends the loan's disbursement and does so on February 10, the borrower will be required to pay a 25-day broken period interest penalty on March 5th. As a result, the actual loan payments will begin on April 5th. The entire sum that the borrower spent for this broken period represents the lender's gain.
You are now aware of what is BPI in LIC home loan.
Read More: Can you get a LIC home loan for B Khata? How to check home loan eligibility in LIC? How to apply LIC home loan? How to reduce your home loan interest from LICHFL?Your Feedback Matters! How was this Answer?
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What is BPI in LIC home loan?
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2022-12-28T20:38:11+00:00 2023-09-21T15:25:16+00:00Comment
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