Interest is calculate on drawing power amount instead of outstanding amount.

Dear Mr Manish,

Actual home loan taken : 7,80,000/-

part payment done a year ago: 50,000/-

after paying the EMi for around 4 years,

outstanding amout = 4,68,000/-

Drawing power = 5,18,000/-

interest rate = 10% 

If I use the emi calculator I must be charged 3900/- for the outstanding amout but its statement shows I need to pay aprox 4400 interest, which is calculated on drawing power. Why is it? I think SBI should charge the interest on outstanding not on the drawign power. Please clarify…!

 

Thanks

-Rama krishna