I am going to take a Home loan from ICICI Bank for amount Rs. 23 lacs. My apartment is still under construction and looks like a developer will give possession after 1 Year at least. Assuming bank will sanction loan with tenure of 20 Years with EMI being Rs. 22043
For the amount being disbursed from a bank, I am assuming bank will disburse 10 lacs on sanction and then will disburse 5 lacs after 6 moths. And remaining 8 Lakh on possession.
I want to opt for Pre-EMI (or EMI under construction) option. For a partly disbursed home loan, there are two options as per info. given on http://www.icicibank.com/Personal-Banking/loans/home-loan/repayment.page
I don’t want to go with Pre-EMI as it will pay only the interest. So I want to go with ‘EMI Under Construction‘.. as it will include both interest and principal components.
My doubt are:
- Will it be beneficial for me to go with EMI Under Construction instead of Full EMI (which will be Rs. 22043 as per full amount of Rs. 23 Lakhs)?
- How EMI Under Construction is calculated?
- And how EMI will be calculated after possession? Let say developer will give possession after 1 year, will the EMI based on remaining 19 years ? or they will still consider 20 years?
Overall, please suggest me the best option. Thanks.
Jignesh-1) It is beneficial to go for regular EMI. Because the loan outstanding will start to come down immediately. But you have to check on your own about the affordibility also.
2) Please refer my earlier post on the same “Home Loans-Meaning of EMI, Pre-EMI and Pre-Construction Period“.
3) If you opted for Pre-EMI then the tenure actually start after the construction period is over. However, if you opted for EMI under Construction i.e full EMI then it will start immediately after the first disbursement.
Thanks Basu for your inputs 🙂