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How To Choose Between EMI And Pre-EMI During Home Purchase?

5 Dec 2020


This blog article is for home buyers and empowering them to make an informed decision based on their current situation of accommodation and income:

  • What is EMI?
  • What is Pre-EMI?
  • Difference between EMI and Pre-EMI?
  • When will EMI be ideal?
  • When will Pre-EMI be ideal?

As it is the most affordable way of buying a house, most buyers fund their new home through a home loan. In several different forms, a home loan repayment plan may be structured. It is of utmost significance to find a lender with a minimal interest rate.

Two important alternatives must be understood: choosing carefully between pre-EMIs and EMIs. There are forms of repaying the balance of the loan to help you better control your funds when constructing your dream home. However, the repayment ability may be influenced differently by each of them. Let’s understand these in detail.


Equated Monthly Instalments (EMIs) are the standard repayment of home loans paid for a selected period by you each month. This involves both the principal and interest. If you have used the Pre-EMI option, when the property is completed, the full-fledged EMI payment begins.


Pre-EMIs are the monthly payments a home buyer chooses to make on the interesting part of the home loan. This choice is presented if the property is under construction and is offered under the Construction Linked Plan by the developer.

It is simply the reduced payment you make since the principal portion of the loan is not included. It is not considered to be part of the tenure of the home loan, but while the asset is under construction, it is intended to reduce the payment burden.

You can learn more from Magnolia Property Advisors here EMI Calculator 


Loan disbursement – You can ask for full disbursement of the loan sum if you go in for a full EMI, while the loan amount is partially given in the case of Pre EMI. However, the interest on the actual amount of the loan disbursed is still determined.

Loan repayment – In the case of Pre EMIs, the installment amount charged at the beginning of the tenure is much smaller, but in the case of full EMI, it is a much greater amount.


  • If the property is purchased for long-term investment,
  • If you want to repay the mortgage on the property as soon as possible and reduce a home loan’s long-term liability. The additional interest payments on the home loan would be saved.
  • If you want to reap tax benefits as soon as the tenure of repayment is defined.
  • If you see a pause in the project construction time because once the project is complete, the pre-EMI continues to be paid. This means that the home loan would end up paying a more substantial amount of interest.
  • If there are no other investments you need to make.


  • For homebuyers who are waiting for a shift in the revenue band or cannot afford to pay the entire EMI at present, the pre-EMI option is perfect.
  • To resolve emergencies, the creditor needs to have a contingency fund.
  • To get better returns, whether the borrower wishes to spend the difference between Pre-EMI and EMI more.
  • If the borrower lives in a rented apartment and has a substantial amount of rent to pay.


The same tax advantages are enjoyed by both the pre-EMI and EMI options, as the tax deduction is not available while the property is under construction. The amount of interest paid in both pre-EMI and EMI options is aggregated and considered for a tax deduction in five equal installments only after the borrower receives the certificate of ownership.

EMIs and pre-EMIs are strategic decisions that you need to take as a buyer, bearing in mind the prevailing market conditions, the revenue and expense, and the project’s resale value. Now with total certainty about pre-EMI and EMI, when you purchase your new home, you can make an educated decision about how to repay the home loan. Note, spend more intelligently and pay more intelligently!

Apart from EMI & pre-EMI, Kolkata based real estate brand Magnolia offers other payment flexibilities also. Check it out in the link here Luxury Apartments in Rajarhat


Most buyers fund their new home through a home loan. It is of utmost significance to find a lender with a minimal interest rate. Choosing carefully between pre-EMI and EMIs is a strategic decision that you need to take as a buyer. As a trusted real estate brand for almost a decade, Magnolia wants its prospective customers to spend more intelligently and pay more wisely.

Check their newly launched Rajarhat project Magnolia Merlion



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