Things you should know about the home loan EMI

Things you should know about the home loan EMI

What do you mean by EMI? How much is the EMI associated with a home loan? The EMI depends on the principal amount and interest on it. It is calculated on the basis of loan amount, the interest rate on borrowed sum, and the time to repay the loan. 

If we talk about applying for a loan, one of the important things to consider is the money amount that you need to borrow. Another important factor to consider for an online home loan is the loan term. 

The third important factor is the interest rate. These three factors decide the EMI on the home loan. Read the article to learn more about home loan EMI.

What do you mean by pre-EMI?

The pre-EMI payments  are interest payments. When you make the pre-payments of EMI, you are paying only the interest component of your EMI at the time. You are not paying anything for the principal component when you pay pre-EMI. 

You can pay the amount of pre-EMI when your property, whether the apartment or house, is under construction.

How is the pre-EMI different from EMI?

When people avail of home loans and decide to pay interest with time instead of paying upfront costs, then they need to pay interest until their homes are built. You can use the home loan EMI calculator to calculate the EMI on the loan amount. 

  • You should pay EMI after the work is complete. 
  • The EMI starts to follow when the work is complete
  • The mode of pre-EMI amount reduces the cash outflows more than standard EMI. This option of EMI is also selected when the borrower does not have sufficient income to pay the monthly payments.

What is pre-closure for a home loan?

The early home loan repayment by the borrower is considered as pre-closure of the home loan. The other option to repay the loan amount is to pay upfront costs in full or in parts. If the borrower has enough funds, it is possible to make a complete payment despite of schedule set up in the loan agreement. 

The pre-payment term of a home loan is considered for paying half or the entire outstanding balance despite of schedule. The duration of most home loans range from 15 to 20 years. 

In the specific event that you want to make this before the date of schedule, you should send the letter to your lender or bank. If you decide to pre-pay for a home loan, you can save the time and money that you invest in repaying the loan.

Benefits of pre-closure of home loan

  • Pre-closure and pre-payment of your home loan reduce the interest rates applicable on it.
  • The principal outstanding amount is reduced 
  • It reduces your burden of debt.


Hope you now get a better idea of the EMI on home loans. The pre-closure of the loan is also possible. The pre-EMI is different from the EMI of home loans that you read above in this article.

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