What is the difference between monthly rest & annual rest?
In a monthly rest, the interest is calculated on the outstanding principal at the beginning of every month. In an annual rest, the interest is calculated on your outstanding principal at the beginning of every year. If you are not able to find the answer you are looking for, please send us a message by clicking here. We will address the same.
In a monthly rest, the interest is calculated on the outstanding principal at the beginning of every month. Once the interest is calculated at the rate applicable to you for the month it is deducted from the EMI received during the month. Annual rest works on the same principal only the interest is calculated on your outstanding principal at the beginning of every year. It is also commonly known as “Yearly Reducing Balance”. Monthly reducing balance is a better option all other things being equal as you get immediate credit for repayment and the interest component keeps reducing almost immediately on a monthly basis.
