Quote:
Originally Posted by nitesh321
Pre-EMI is the interest on the partial disbursals till the final disbursement is made. Once the final disbursement is made by the HFC to the builder, your EMI starts.
So, for first two years (construction period), you would be paying only interest and not repaying any principal; thereafter, you would be paying your EMI for the tenure.
So you are paying interest for two years plus EMI for 240 months. (Not actual EMI)
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Agreed: but even in that period, a person can pay an amount equal to principle (in regular intervals), equal to that deducted as a part of emi for that tenor.
And that would help to reduce your end loan amount, ultimately reducing your loan or your tenor.
What my point is with pre-emi you can simulate your emi, but other wise is not possible.
Now this is investor's choice weather he wants to pay up principle to simulate pre-emi as emi or he wants to invest that amount on better returns to earn an interest more then he have to pay to bank.
Quote:
Originally Posted by nitesh321
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Moreover if you are staying on rent before getting the possession of your new property, you will have double burden of Rent + pre-EMI (Not actual EMI)
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This is definitely a point to consider as a parameter to choose between emi and pre-emi. If a person is living in a low rental house and getting good returns from his invested principle amount, than he can go for pre-emi else emi.