Getting your loan sanctioned is just half the story. The other half consists of EMIs to pay. To better prepare yourself to tackle that climb, you will need to do your research on the different types of EMI’s available to you. If you are a home loan borrower, there are a few things you will need to keep in mind while talking money.

What Makes Up a Home Loan

A home loan is the amount you borrow from a financier to buy a property. After you put in the down payment for the property, the company will make up the difference. When you apply for a loan, you deal with factors like loan eligibility, home loan interest rates, and EMIs. NBFC’s like Bajaj Finserv offer good rates and benefits.

Different Types of EMIs

EMIs consist of two elements – the interest and the principal. The calculation of the monthly payment is the sum of the two variables divided by the repayment tenure. There are three types of home loan EMIs in India.

  1. The Pre-EMI: The option is given to people who are keen on buying a house that is a part of a development project or is under construction. The loan that is approved by the financier is given to the borrower in instalments. When you look at pre-EMIs, the time gap between the first instalment and the complete disbursal of the loan could span across years. The interest on the amount you get in instalments is the only expense you would have to pay till you avail the entire loan.
  2. EMI that is Tranche Based: This EMI is where you begin paying the amount that is calculated for the principal even though the entire loan hasn’t been availed yet. The minimum payment is the interest for the loan and anything above that goes toward the principal, which means you would repay your loan faster. This choice of EMI is ideal for borrowers seeking to reduce the tenure of their loan.
  3. Accelerated EMIs: This scheme takes into consideration possible bonuses and increments you might reserve in the near future. With these increases in hand, you would be able to afford a higher EMI. With a re-adjusted EMI, you will invariably pay off your loan sooner rather than later. This type of EMI option gives you the choice to repay the amount before the specified tenure, so that you can save money on interest.

When you consider home loan EMI in India, the above are options you can avail. NBFCs like Bajaj Finserv allows you to calculate and apply online for home loan EMI. However, you will need to take a decision on opting for either fixed rate of interest or a floating rate of interest while applying for a home loan, as the interest rate would change the EMI amounts.

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