When taking a loan, you’re not just deciding on the amount and tenure — repayment frequency is equally important. Most lenders offer monthly and quarterly repayment options, and choosing the right one can save you money and align with your cash flow.
Monthly Repayments
How it Works: You pay EMIs every month, reducing the outstanding principal regularly.
Pros:
Lower per-installment amount compared to quarterly
Faster reduction in interest due to more frequent payments
Easier to budget with regular salary income
Cons:
More frequent payment schedule requires strict budgeting
May not suit people with irregular income patterns
Quarterly Repayments
How it Works: You pay EMIs every three months, usually larger in amount.
Pros:
More cash flexibility between payments
Better suited for people with seasonal or business-based income
Can align with quarterly bonuses or profit cycles
Cons:
Interest accrues for longer before each payment, leading to higher total cost
Larger installment amount every quarter can strain finances if not planned
Which One Should You Choose?
Choose Monthly: If you have a steady monthly salary and want to reduce interest faster.
Choose Quarterly: If your income comes in lump sums or is seasonal, such as from business profits or agricultural cycles.
Pro Tip: Always compare total interest payable for both frequencies — monthly payments usually cost less in the long run.
FAQs
Q1: Does monthly repayment always save more interest?
A1: Usually yes, because the principal is reduced more frequently, but confirm with your lender’s amortization schedule.
Q2: Can I switch from quarterly to monthly repayment later?
A2: Many lenders allow it, though charges may apply.
Q3: Which is better for business owners?
A3: Quarterly repayment can align with quarterly profits, but monthly repayment can help reduce total loan cost.
Q4: Are quarterly repayments common in home loans?
A4: They are less common for salaried borrowers but offered for certain business or agricultural loans.
Published on : 11th August
Published by : SMITA
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