{"id":74,"date":"2020-02-19T11:24:54","date_gmt":"2020-02-19T11:24:54","guid":{"rendered":"https:\/\/www.loanfasttrack.com\/blog\/?page_id=74"},"modified":"2020-02-19T11:27:04","modified_gmt":"2020-02-19T11:27:04","slug":"is-pre-emi-better-than-full-emi-find-out-yourself","status":"publish","type":"page","link":"https:\/\/www.loanfasttrack.com\/blog\/is-pre-emi-better-than-full-emi-find-out-yourself\/","title":{"rendered":"IS PRE \u2013 EMI BETTER THAN FULL EMI. FIND OUT YOURSELF."},"content":{"rendered":"\n
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One fine morning you wake up to read the newspaper and found pamphlet\nadvertising – buy a luxurious apartment & captioned in bold “EMI\nstarts only on possession”. You are happy to read and consider this\nas an opportunity to save money thinking this is a flexibility offered by the\nlender. The advertisement tactics is so impressive that with thrill and\nenthusiasm you ring on the contact number mentioned on the pamphlet – only\nto thereby learn about Pre-EMI. <\/p>\n\n\n\n

Pre EMI is generally associated with under construction\nproperties. In pre EMI you pay only the interest on the partial disbursements\nof your loan amount. The EMIs paid using the Pre-EMI option do not have any\nimpact on your principal amount, loan repayment tenure, or rate of\ninterest. The pre-EMI period is not part of your loan tenure. For\ninstance, if you opt for a loan on under construction property whose procession\nis in 3 years with the loan tenure of 20 years and you go for pre EMI\noption, your total loan tenure would be 3 years (pre-EMI period) + 20\nyears (loan tenure) = 23 years.<\/p>\n\n\n\n

However you get the liberty to switch the repayment mode any\ntime prior to possession. If you think you are comfortable paying the\nEMIs you may choose to shift from Pre-EMI to EMI anytime in the mid-term before\ntaking the possession of the property.<\/p>\n\n\n\n

Pre-EMI is Suitable:-<\/strong><\/h3>\n\n\n\n

1) If you have interrupted\nflow of funds<\/strong> and cannot afford to pay loan principal. You can opt for\npaying Pre-EMI till you start affording paying full EMI. <\/p>\n\n\n\n

2) If you want to sell\nthe property immediately after taking the possession<\/strong> of the same. Pre EMI\ncan be an ideal option for property investors who wish to sell the\nproperty once construction is completed.<\/p>\n\n\n\n

3) If you wish to same\nmoney during the pre-EMI period and invest it elsewhere<\/strong> to\nearn consistent returns. You may use the saved amount to pay EMI at a later\nstage.<\/p>\n\n\n\n

4) If you are staying in\na rental apartment and has less money to pay the rent<\/strong> as well as the\nloan repayment EMI.<\/p>\n\n\n\n

5) If you want to reserve<\/strong>\nsome funds for meeting emergency\nsituations<\/strong>. <\/p>\n\n\n\n

6) If you are facing any\nfinancial crisis<\/strong> and has an urgent credit requirement.<\/p>\n\n\n\n

Tax Benefits<\/strong><\/h3>\n\n\n\n

There is NO<\/strong>\ntax benefit in the Pre-EMI option. You do not get any advantage of tax\ndeduction until you receive the possession of the property. However in the\nrespect of interest paid for the period prior to the year of taking possession,\nyou can claim aggregate of such interest in the five equal instalments from the\nyear in which the construction is completed u\/s 24(b) of the Indian income tax\nact under the head income from house property.<\/p>\n\n\n\n

Although the option of pre-EMI reduces the burden on your pocket\nthere are a few loopholes<\/strong> in it.<\/p>\n\n\n\n

1) In pre-emi you are not\nallowed to pre close your loan<\/strong> or\nmake any part payment<\/strong> to the loan account. <\/p>\n\n\n\n

2) You are not allowed to\nbalance transfer your existing loan <\/strong>with high interest rates to a new\nlender with low rates. Only when you start paying EMI after receiving\nthe successful possession of your property you are able to transfer your loan.<\/p>\n\n\n\n

3) Often in under construction disbursements, the lenders by default provide you with pre emi option<\/strong>\nwithout your consent. Therefore it is important that you know the terms and\nconditions of the lenders prior hand. Also ensure you\nread carefully the docket kit for disbursement before making blind\nsignatures and tick mark the appropriate option suitable for you if the lender\nmistakenly overlooks the same.<\/p>\n\n\n\n

4) In case there is a delay\nin possession<\/strong> or completion of the project, you need to pay pre-EMI unnecessarily<\/strong>. <\/p>\n\n\n\n

Conclusion:-<\/strong><\/p>\n\n\n\n

It is therefore important that you wisely\nchoose between Pre-EMI and Full EMI option while choosing a lender\nwith nominal home loan interest rates to fund your under construction\nproperty. <\/p>\n\n\n\n

On the other hand the term Pre EMI\ncan also be explained with reference to the cases\ndisbursed before the EMI date. Explained ahead:- <\/p>\n\n\n\n

You are required to choose an EMI date for the automatic debit of your monthly EMI outgo from your linked bank account. EMI dates are generally 1st, 5th or 10th of every month. You need to choose a date of your comfort for your automatic deduction of EMI. For instance, suppose your case is disbursed on 25th of the month and you choose 5th as your EMI date then from 25th – 5th you have to pay the pre EMI i.e. you need to pay interest for the said period on the total amount of loan disbursement.

Get more info at-<\/strong> https:\/\/www.loanfasttrack.com\/<\/strong><\/a> <\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

One fine morning you wake up to read the newspaper and found pamphlet advertising – buy a luxurious apartment & captioned in bold “EMI starts only on possession”. You are happy to read and consider this as an opportunity to save money thinking this is a flexibility offered by the lender. The advertisement tactics is so impressive that …<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"open","ping_status":"closed","template":"","meta":{"footnotes":""},"class_list":["post-74","page","type-page","status-publish","hentry"],"_links":{"self":[{"href":"https:\/\/www.loanfasttrack.com\/blog\/wp-json\/wp\/v2\/pages\/74","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.loanfasttrack.com\/blog\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/www.loanfasttrack.com\/blog\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/www.loanfasttrack.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.loanfasttrack.com\/blog\/wp-json\/wp\/v2\/comments?post=74"}],"version-history":[{"count":1,"href":"https:\/\/www.loanfasttrack.com\/blog\/wp-json\/wp\/v2\/pages\/74\/revisions"}],"predecessor-version":[{"id":76,"href":"https:\/\/www.loanfasttrack.com\/blog\/wp-json\/wp\/v2\/pages\/74\/revisions\/76"}],"wp:attachment":[{"href":"https:\/\/www.loanfasttrack.com\/blog\/wp-json\/wp\/v2\/media?parent=74"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}