Pre-emi on home loan full disbursement ready possession flat


Hi all,

AFAIK, Pre-EMI is charged by HFCs only when the property/flat is under construction and hence full disbursement of the loan is not done. However, it seems that they charge pre-EMI even for fully disbursing the loan amount for a ready possession flat. Is this valid?

Also, any idea how they calculate the pre-EMI amount?

Please advise.

 
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Jadhav & Associates

IT does not matter what name you give to the charges.

The lender charges many fees as you are the needy person and can't say no to the lender. The charges are one time when you are given a loan and the other charges are the interest levied on the principal. The EMI is arrived at by adding the interest payable and some principal amount so that the installments become equal (that is why it is called equated monthly installments). So pre-EMIis nothing but just the interest charges on the amount provided to you by way of loan. It can be charged until the date when you and lender agrees to start the EMI.

pre-EMI is calculated as a product of the principal amount of the loan and the annual interest rate applicable. e.g. suppose you have taken a loan of Rs. 10 lakhs at a rate of 10.50% then the pre-EMI interest may be calculated as (10.25/100 x Rs. 10 lakhs)/12 per month.

The banks may charge more depending on their policies (which they normally do not tell you about or tell you in such a manner that you do not understand). These policies are made in such a way that they all benefit the banks and you are the loser.


S Jadhav


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