The Telegraph
Since 1st March, 1999
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Flexible payback schedule on loans

HSBC has unveiled ‘My Terms Credit’, a flexible personal loan that allows one to decide how they want to repay it. One can choose from four ways to repay the loan. First, you can choose to pay a lower EMI in the first year and a higher EMI after one year.

Second, one also has the flexibility to pay interest on utilised loan amount only and not on the entire loan. For example, you estimate a loan requirement of Rs 3 lakh for your daughter’s marriage. The bank would give you a limit of Rs 3 lakh, but actually you use only Rs 2.5 lakh. Thus, you have to pay interest on Rs 2.5 lakh only.

Third, the option of getting the last EMI waived by paying a marginally higher interest rate (available for loans of 48- month tenor only and applicable if your repayment is consistent throughout the period of the loan). Last, standard EMI repayment or EMI for each month will be the same for the tenor of the loan. The rate of interest will be on a par with the existing personal loan products and will vary between 15 and 20 per cent.

The loans are available from a minimum of Rs 50,000 to a maximum of Rs 5,00,000 and with a flexible loan tenure up to four years. Processing charges at the rate of 2 per cent of the loan amount will be charged, with discounts offered to existing HSBC customers above six months.

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