Banking business mainly includes accepting deposits and lending. Bank pays a certain amount of interest to people who deposit money in the bank.
On lending, bank charges a certain amount of interest at a particular rate. The interest is paid at specific intervals or after the loan period ends.
The interest is calculated as per the agreement terms between the bank and the customers.
At times, it happens that a customer wants to pay a part of interest along with the principal amount.
Whereas other times, if the customer wants to pay the principal in specific installments then the interest’s effect on the loan tenure gets lowered.
