Instead of EMIs (equated monthly instalments), the customer will pay reducing monthly instalments. While the initial instalments will be higher (than the EMI on the same loan amount for the same tenure), the instalment amount keeps reducing throughout the loan tenure.
Speaking at the launch, Rajiv Anand, Executive Director (Retail Banking), Axis Bank, said, “For the benefit of our customers, we have launched QuikPay Home Loan, which is an innovative product that will reduce the overall interest burden on the borrower. We are confident that this unique concept of ‘reducing monthly instalments’, along with big savings on interest, will be an attractive proposition for home buyers.”
To illustrate the offering, let’s consider a typical home loan of Rs. 50 lacs for a 20 years at 9.00% pa. This loan will have a total interest outgo of Rs. 57.96 lacs over 20 years for the customer. However, with Axis Bank’s QuikPay Home Loans, for a loan of Rs. 50 lacs for the same tenure, even with a slightly higher annual rate of interest of 9.20%, the overall interest outgo will be only Rs 46.19 lacs, thereby resulting in an overall saving of Rs 11.77 lac for the customer.
Refer to the annexure for a detailed comparative break-up of the loan repayment schedule.