Reducing-balance loan in VyajPay

Reducing-balance is the bank-style EMI model. Interest is charged on the unpaid balance, so as the borrower pays down principal each month, the interest portion of each EMI gets smaller. The EMI itself stays constant.

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The math

r = annual rate / 100 / 12

EMI = P × r × (1 + r)N / ((1 + r)N − 1)

Example
₹56,10,000 at 8.5% per year for 360 months gives EMI ≈ ₹43,137/month.

Step-by-step

  1. Open Add Loan

    Borrower Detail → Add Loan.

  2. Pick Standard EMIs

    Choose Standard EMIs, then select Reducing as the interest type in the advanced section.

  3. Enter amount, annual rate, tenure

    Annual rate is converted to monthly r = rate / 100 / 12 internally. Tenure is required.

  4. Create the loan

    EMI = P × r × (1+r)^N / ((1+r)^N − 1). VyajPay computes and locks the schedule.

Frequently asked questions

Monthly rate r = annual rate / 100 / 12. EMI = P × r × (1 + r)^N / ((1 + r)^N − 1) where N is the number of EMIs.
Interest accrues only on the unpaid balance. After each EMI, the principal drops, so the interest charged next month is smaller. Total interest paid over the tenure is lower than Flat at the same nominal rate.
Example: ₹56,10,000 at 8.5% per year for 360 months. r = 0.0070833. EMI ≈ ₹43,137 per month.
Loan Detail shows the running outstanding after each recorded payment. A full month-by-month amortization breakdown is part of the PDF report.

Related guides

Loans — Flat

Simpler model, higher total interest.

Loans — Interest-Only

No tenure.

Reports

Amortization in the PDF report.