Loan a/c No.11266316<br />
Dear sir, <br />
I have availed a consumer loan of Rs 75000/- @ 19.25% interest Flat per annum ( to be charged on reducing balance of the principal outstanding amount over the tennure of the loan)from citifinancial dt 29 Mar 07 and paid 33 instalment of Rs 2989/- each every month. <br />
<br />
The citi financial has imposed Flat rate interst for 42 month and made EMI of Rs 2989/- each (75000 X 19.25% X 3.5 yrs =50551 (interest Plus 75000) = 125551 divided by 42 = 2989 ) to be payable up to oct 10 <br />
<br />
My contention is that it is flat rate not flat rate per annum as stated above and there is NO element of interest on reducing balance as per aggreement.<br />
<br />
I explained them that in Flat rate annum ( to be charged on reducing balance of the principal outstanding amount over the tennure of the loan ), the principal component of EMI though reduced every month, is summated annually. Therefore, the interest is calculated on the original loan amount for the entire year. At the end of the year, the accumulated principal component is deducted from the original loan amount and the interest for the next year is calculated on this reduced loan amount.<br />
<br />
Now in my case the calculation of interst should have been as follows:----<br />
<br />
1st year 75000X19.25% = 14437.50 ( interest) ( 29 mar 07 to 28 mar 08)<br />
Add principal = 75000.00<br />
Total = 89437.50<br />
EMI return 1st year= 35868.00 ( 12 X 2989 ) <br />
Balance amount = 53569.50<br />
<br />
2nd year 53569.50 X 19.25%= 10312.12 ( interest) ( 29 mar 08 to 28 mar 09 )<br />
<br />
Add principal = 53569.50<br />
Total = 63881.62<br />
EMI return 2nd year= 35868.00 ( 12 X 2989 ) <br />
Balance amount = 28013.62<br />
<br />
3rd year 28013.62 X 19.25%= 5392.62 ( interest 29 mar 09 to 28 mar 10 )<br />
Add principal = 28013.62<br />
Total = 33406.24<br />
paid up to Jan 10 = 26901.00 (EMI paid from may 09 to jan 10 )<br />
Balance amount as on today= 6505.24 <br />
<br />
this amount will be paid in next two month.<br />
As such my loan which is going to be paid within next month is asked to pay up <br />
to oct 10 <br />
you are requested to look into this matter and and advise me<br />
<br />
JASWANT SINGH SAMRA ( Borrower )