Payment plans and finance
Pre-EMI
Interest-only payments a buyer makes on the disbursed part of a home loan before full disbursement. Full EMIs start after the last tranche.
Also called: pre EMI interest
While a home loan is partly disbursed, the buyer pays interest only on the amount disbursed. These are pre-EMI payments. Once the full loan is disbursed, regular EMIs with principal and interest begin.
Example: ₹20,00,000 disbursed at 8.5% a year means pre-EMI of about ₹14,167 a month. As more is disbursed, the pre-EMI rises. Buyers who are also paying rent feel this most, which is why subvention schemes became popular.
Related terms
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