All About Pre-EMI

Purchasing a property is a major investment and a dream for many individuals. However, property prices have steadily increased in the past years, whether it is for an affordable 1 BHK in Thane or luxury apartments in Mulund. These days purchasing a home is often made possible with the help of home loans. Knowing the best loan providers and interest rates can help you get a good deal with better repayment options. This is where the knowledge of pre-EMI and full EMI is handy.

What Is Pre-EMI?

For those of you looking to invest early in upcoming real estate projects in Thane or other ongoing projects, opting for a Pre-EMI home loan is ideal. Pre-EMI is the monthly payment of the interest amount on the disbursed section of the home loan. This facility is only available for projects that are under construction.

Here, the loan provider disburses a certain amount of the home loan at a time. The individual pays interest only on the disbursed loan amount regardless of the principal amount. This allows for huge savings and enables people on a budget to purchase upcoming flats in Thane. Note that the tenure of pre-EMI ends the moment the property is constructed.

Example Of Pre-EMI Calculation

For instance, assume a person borrows a loan of INR 20 lakhs at 6% interest for 15 years for an under-construction residential property in Mulund. The project is expected to be completed in 3 years during which the borrower opts for Pre-EMI. Here, the bank will not disburse the entire amount but rather a portion on which the borrower will pay interest.

Let’s assume the agreement is to pay INR 2 lakhs every 6 months. The interest calculation will be (disbursed amount*interest rate/12 months). In this example, the interest will be (200000*6%/12 months) = INR 1000. After the next payment of INR 2 lakhs, the interest will be calculated on the total disbursement value i.e. INR 4 lakhs which is INR 2000.

As the disbursement amount increases, the interest increases proportionately. Unlike a full-EMI loan, here the borrower is not paying interest on the principal amount from day 1, but only the amount borrowed at a particular time.

When To Choose The Pre-EMI Option?

  • When you are on a budget and looking to invest in under-construction projects. Since the interest is only on the disbursed amount and not the principal amount, it is much smaller.

  • When you are looking to sell the property post-construction.

  • If you are expecting an increase in income in the coming years.

  • In case you need a loan urgently and do not have ample funds.

Note, always pick a reputed real estate developer in Thane, such as AceRealty, when opting for Pre-EMI. In the case of new and inexperienced companies, the construction may exceed the timeline. This can be a burden on you as Pre-EMI continues till the project is under construction. In such cases, it is advisable to opt for full EMI from the start.


When looking to purchase a property, be sure to check for loan eligibility and availability in Pre-EMI and full EMI options. This will help you make informed decisions that best suit your budget.