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What is Loan Amortization?
Your EMI is ₹20,000. So ₹10,000 goes to principal and ₹10,000 to interest, right? Wrong. In the first few years of your loan, the split is nowhere close to equal. You're paying way more interest than principal - sometimes even 80-20. That's why your loan balance barely moves, even though you've been paying religiously. It's called a Loan ...
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