While a 1% difference in ROIs doesn’t seem significant, when you convert the rate into total interest to be paid over the repayment tenure using GyanDhan’s EMI calculator, it’s exorbitant.
Let’s assume you’re thinking of starting the education loan Incred process. Your loan amount is INR 30,00,000 at 13% ROI with an 8-year repayment period. In this instance, your monthly EMI is INR 61,893. Keeping all other factors the same, let’s see what happens if the ROI is 12%. The monthly EMI decreases to INR 58,998. The difference in savings adds up to INR 277,920 over the repayment tenure!
The example proves that even a 1% increase in interest rate can turn out to be detrimental to your future financial interest.