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Understanding EMI and Pre-EMI during the Home Purchase




Buying a dream home through savings is impossible. Property rates are booming day by day, and the only way to purchase property is through a home loan.

When you purchase an under-construction property, you do not know whether your loan repayment mode is Pre-EMI or EMI. All you come to know is, you have to pay ‘x’ particular amount every month.

These loans can be repaid in budgeted Equated Monthly Instalments (EMI’s) over particular tenures. As a borrower, you need to understand the difference between EMI and Pre-EMI.


What is EMI?


EMI refers to a normal home loan that you pay every month for your already selected tenure.

It includes two components of interest as well as the principal amount. It starts only after the completion of the construction of your home.


When EMI is a Good Option?

EMI refers to a normal home loan that you pay every month for your already selected tenure. It includes two components of interest as well as the principal amount.

It starts only after the completion of the construction of your home


When EMI is a Good Option?

It's advisable to start paying your EMI home loan at the earliest to reduce long-term financial constraints. This way you can save extra interest costs on your home loan.

If you anticipate a delay in construction, full EMI would be preferably a good option to opt-in as Pre-EMI payment continues till the completion of construction.


What is Pre-EMI?

Pre-EMI loan home repayment includes only the interest element of your home loan. With the Pre-EMI option, you are not paying any principal amount. It is basically, a reduced payment option as it does not consider the principal amount.

Once, the construction of the house is completed then you would be asked to pay full EMI. One need to note that, Pre-EMI is simply designed to lessen the burden of individuals till the time asset is under development


When Pre-EMI is a Good Option?

The pre-EMI loan helps you in the better managing of cash flow as the amount is less as compared to full EMI’s. It is an ideal option while selling the property on completion. One can opt for Pre-EMI’s when the individual is expecting a hike in their income.

Tax Benefits:

There are no tax benefits, whether one opts for full EMI’s or Pre-EMI’s. Tax reduction is not applicable until the construction is complete.

Sambhav Group assists you in providing a modest rate loan facility by adjusting to customer requirements. We take care of your loan arrangements and all the legal proceedings while you enjoy the comfort of your home.

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