Key Takeaway
Pre-EMI interest is simple interest charged on the disbursed loan amount during construction. On a ₹15 lakh disbursement at 8.5%, the monthly pre-EMI is ₹10,625 , and this does not reduce the principal.
Pre-EMI Interest Calculator
Estimate monthly simple interest paid before your regular home loan amortizes.
Pre-EMI Cost Analysis
Note: Pre-EMI does not pay off principal balance. It is simple interest on disbursed capital.
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Frequently Asked Questions
What is Pre-EMI?
When you take a loan for an under-construction property, the bank disburses the loan in tranches based on construction progress. Pre-EMI is the interest paid only on the disbursed amount until the final disbursement.
Does Pre-EMI reduce my principal loan amount?
No, Pre-EMI only covers the interest component on the disbursed funds. Your principal amount remains unchanged until the full loan is disbursed and the regular EMI starts.
Can I claim tax benefits on Pre-EMI interest?
Yes, but not immediately. The pre-construction interest can be claimed as a deduction under Section 24(b) in five equal annual installments starting from the financial year in which the construction is completed.
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