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.
