Interest is calculated on daily reducing balance method, hence customer needs to pay interest only on amount utilized/outstanding and as per the number of days of amount utilization. Once customer makes principal amount payment in full or in part, available limit is revised accordingly, and interest cycle is recalculated.
For e.g. Take an instance of a customer with an approved credit line of Rs 1 Lakh for 36 months tenure. Customer withdraws Rs 10,000; his available limit is revised to Rs 90,000. He uses it for 10 days and then repays entire Rs 10,000 to LoanTap, his available limit is again revised to Rs 1 Lakh. Here, customer will need to pay interest on Rs 10,000 for 10 days only.