Multiple Interest Types

PrismERP allows users to select from three interest types when adding a business loan:

• Reducing Balance: Interest is calculated on the remaining loan balance. As payments are made, the principal decreases, reducing the interest amount. This results in gradually smaller EMIs over time.

• Variable Rate: The interest rate can change during the loan period based on market conditions or predefined rules. EMIs may increase or decrease if the interest rate changes.

• Fixed Rate: The interest rate remains constant throughout the loan tenure. EMIs stay the same, providing predictable repayment amounts.