A borrower repays the bank in principal and interest on the first day of each month. For CIMB, the amount is fixed for whole tenor of the loan. This fixed amount is called Equated Monthly Installment or EMI. If the first month is not a full month, the customer will pay interest only. This interest-only period is also called Pre-EMI. Principal and interest payment (EMI) will begin on the next full month.
EMI = Principal + Interest. The loan principal is reduced after each EMI payment. Interest is calculated on the remaining principal balance. At the beginning, EMI will consist mainly of interest amount. Towards the end of the tenor, EMI will consist mainly of principal amount.
Customer can request a repayment schedule (also called amortization schedule) from Relationship Manager with detailed information on monthly payments, principals, interests and loan balances.
