BPI (Broken Period Interest) or Gap Interest is charged when the time between the actual date of disbursal and the 1st installment is more than 31 days. Eg. if a loan is disbursed on the 25th of August and the repayment date is the 1st of every month, then the 1st EMI will be deducted on the 1st of October. The system calculates the BPI amount using the formula of 1/12 for a particular month, irrespective of the number of days in a month of 30, 31, 28, or 29. So, a month is always considered 30 days.


Note: The processing fee & GAP interest is deducted from the approved loan amount before it is disbursed.


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