What is an EMI and when does it start?
Home loan EMIs are the monthly repayments against the borrowed amount which consist of both the principal amount and the agreed interest. The home loan EMIs start based on the terms and conditions agreed upon between you and the financial institution providing the loan.
Typically, there is a grace period called the moratorium period before the EMIs begin. During this period, as a borrower, you are not obligated to make any EMIs, and the lender may choose to include the added interest to the outstanding loan amount or calculate it separately with the help of a home loan EMI calculator.
The duration of the grace period can vary among lenders and depends on factors such as the borrower's profile, your lender’s policy, and the agreed loan agreement. Typically, the grace period is three to six months.
Once the grace period ends, the regular repayment schedule begins, and you are expected to start making monthly instalments towards your home loan on or before the due date.
Remember to thoroughly review the loan agreement, consult with the lender, and be prepared to make regular repayments once the grace period ends. By staying informed and responsible, you can make your journey of home ownership seamless with the help of a home loan.
How is your final EMI amount decided
The final EMI amount for a loan is determined by several key factors, including the loan principal amount, interest rate, loan tenure, frequency of compounding, and amortization schedule. The type of loan, special features, and prepayments can also influence the EMI. To calculate the EMI, financial institutions use mathematical formulas, and there are online tools available to estimate it based on your loan details. Understanding these factors is essential to ensure that the EMI aligns with your budget and financial goals.