7. What is difference between EMI and Pre-EMI? How is Pre-EMI calculated?

EMI – Equated Monthly Installment. This is the amount paid monthly by a borrower to the bank or any other lender. It basically has two components –

  1. 1. The portion of the principal amount
  2. 2. The interest portion for that month

Pre-EMI – Prior to final disbursement of the Housing Loan, you pay interest on the portion of the loan disbursed. This interest is called pre-EMI interest. It is payable monthly/quarterly upto the date of commencement of EMI.

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