I had taken a personal loan of Rs1 lac from Citi Financial due to some urgent requirement. As per the terms and condition, they agreed to lend me the same at 16% interest annually-reducing for 3 years.My EMI as per their calculations were coming to around Rs4300 pm.
I readily agreed without even calculating and signed the papers. But once I returned home I was stunned to learn that at 16% PA, for 36 months the EMI should be not more tha Rs3650. So where is the catch??? When inquired back at Citi Finance, they told me they calculate it FLAT, ie https://m.mouthshut.com/16 rel="nofollow" target="_blank" >@16% PA for 3 years its 48%, so my repayable amount is around Rs 1.55 lacs.So again if someone calculate back, at Rs4300 EMI, I am been asked to pay an interest of 30% PA. I am not sure how they are allowed to operate with this kind of obnoxious interest rates? What is RBI doing?Citi Finance guys can you answer this?