How Interest Rates Change Your Loan EMI

Interest rate is the silent factor that decides how expensive your loan becomes. Many people focus only on loan amount and forget interest. That mistake costs money.

Why Interest Rate Matters

Interest is what the lender earns for giving you money. Higher interest means:

• Higher monthly EMI
• Higher total repayment

Even a 2% change makes a big difference over time.

Example Comparison

Loan: $5,000
Tenure: 36 months

At 10% interest:
EMI ≈ $161
Total repayment ≈ $5,796

At 14% interest:
EMI ≈ $171
Total repayment ≈ $6,156

That’s $360 extra paid just because of interest rate difference.

How to Get Lower Interest

• Maintain a good credit record
• Compare multiple lenders
• Negotiate before signing
• Choose shorter repayment periods if possible

Use EMI Calculator Before Accepting Offers

Always enter different interest rates into an EMI calculator. Never accept the first loan offer blindly.

Final Thoughts

Interest rate decides whether your loan is affordable or stressful. Compare, calculate, then commit.

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