What is Pre - EMI payment..?

What is an EMI ?

You repay the loan in Equated Monthly Instalments (EMIs) comprising principal & interest. Repayment by way of EMI commences from the month following the month in which you take full disbursement.

What is pre - EMI home loan interest?

Pending final disbursement, you pay interest on the portion of the housing loan disbursed. This interest called pre - EMI interest. Pre - EMI interest is payable every month from the date of each loan disbursement upto the date of commencement of EMI.

What is Tranche Based EMI repayment option ?

To help house buying customers save pre - EMI interest, Some Bank and housing Finance Companies have introduced a special facility of Tranche Based EMI.

For under construction properties customers can choose the instalments they wish to pay, till the time the property is ready for possession. Anything paid over and above the interest by the customer goes towards Principal repayment.

The home loan customer benefits by starting EMI and hence repays the loan faster.

Be cautious about your Pre - EMI payment.

Take 100 % of the Housing Loan upfront and save the Pre - EMI, this has become the mantra of many financial companies today.

At face value, it is a great proposition.But, has many risks involved. Delays in the completion of the project burdens you with paying EMI for a property you have not yet taken possession of, along with the rental fee for your accommodation if you are staying in a rented premises.

Phased disbursement linked to work progress makes it obligatory for the builder to stick to time schedules and enables you to exercise control on the builder / promoters / developers for performance. So, it is the right time to exercise caution.

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