There are three types of repayment – 1. INTEREST ONLY: Borrower pays only simple interest on the principal amount every month. At the end of the tenure, the borrower pays the principal and closes the loan. 2. EMI: A fixed amount is paid by borrower to a lender at a specified date each calendar month. Equated monthly instalments are used to pay off both interest and principal each month, Over a specified number of years, the loan is paid off in full. 3. BULLET: Bullet is where payment of entire principal and interest is made at the end of the loan term.