Buying a house under construction? You’ve likely heard the terms Pre-EMI and Full EMI while applying for your home loan. But what do they mean—and which one is better for your financial planning?
In this guide, Vizzve Finance explains the key differences between Pre-EMI and Full EMI, including benefits, drawbacks, and real-world examples to help you make the smartest home loan decision.
💡 What Is Pre-EMI?
Pre-EMI refers to the interest you pay only on the disbursed amount during the construction phase of a property.
🏗️ Applicable when:
The property is under construction
Loan is disbursed in phases by the lender
You don’t pay the full EMI yet—just the interest portion until full disbursement is completed.
🔍 Pre-EMI Key Features:
💰 Lower initial monthly payments
🏠 EMI begins after possession or full disbursal
💳 Doesn’t reduce the principal during pre-EMI phase
🧾 No tax benefit during the pre-EMI period (can be claimed in 5 parts after possession)
💡 What Is Full EMI?
Full EMI means you start repaying both principal + interest from the first disbursement, even if the entire loan hasn’t been released yet.
📅 Applicable when:
You want to start repayment immediately
You're financially prepared to pay full EMIs from Day 1
🔍 Full EMI Key Features:
✅ Principal starts reducing from Day 1
📉 Total interest payout over the tenure is lower
🧾 Eligible for tax benefits under Section 24(b) immediately
💵 Higher monthly outgo in the initial construction period
📊 Pre-EMI vs Full EMI: Quick Comparison
| Factor | Pre-EMI | Full EMI |
|---|---|---|
| What You Pay | Only interest on disbursed loan | Full EMI (Principal + Interest) |
| When It Starts | After partial disbursement | From first disbursement |
| Tax Benefits | After possession (in parts) | Immediate under Sec 24(b) |
| Monthly Outgo (Initial) | Lower | Higher |
| Total Interest Paid | Higher over time | Lower |
| Principal Repayment | Starts after full disbursement | Starts immediately |
| Best For | Buyers with tight cash flow | Buyers with steady income |
🧮 Real-Life Example
Say you're buying an under-construction flat worth ₹50 lakh. Your bank disburses ₹10 lakh initially.
✅ Pre-EMI:
Interest @ 9% on ₹10 lakh = ₹7,500/month
EMI starts fully only after full disbursal
✅ Full EMI:
EMI on full ₹50 lakh starts from Day 1 ≈ ₹44,986/month for 20 years
Even if only ₹10 lakh is disbursed, you pay the full EMI
Result:
Pre-EMI saves cash short term
Full EMI reduces total interest long term
🤔 Which One Should You Choose?
Choose Pre-EMI if:
You're paying rent + EMI during construction
You have limited cash flow
You expect income to increase over time
Choose Full EMI if:
You can afford higher payments now
You want to start principal reduction immediately
You want tax benefits sooner
💡 Vizzve Finance Pro Tip:
If you're planning to sell or refinance the house shortly after completion, Pre-EMI might save you upfront costs. But if you’re in it for the long haul, Full EMI is the smarter financial move in most cases.
📂 Tax Implications
| EMI Type | Section 24(b) Interest Deduction | Section 80C Principal Deduction |
|---|---|---|
| Pre-EMI | Allowed only after possession, in 5 equal parts | After full EMI starts |
| Full EMI | Starts immediately (up to ₹2L/yr) | Starts with EMI (up to ₹1.5L/yr) |
🛠️ How Vizzve Finance Helps You Choose
💡 Personalized advice based on your income, property type, and builder status
🔍 EMI calculators to simulate Pre-EMI vs Full EMI outcomes
📈 Tax-saving strategies & eligibility evaluation
💼 Compare lender offers that allow flexible EMI options
📌 Conclusion
There’s no one-size-fits-all answer to the Pre-EMI vs Full EMI debate. Your choice depends on your cash flow, loan amount, tax goals, and possession timeline. But whatever your decision, Vizzve Finance is here to guide you with transparency, smart tools, and expert support.
Published on 3rd july
Publisher : SMITA
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RBI-Registered Loan Partner | 10 Lakh+ Customers | ₹600 Cr+ Disbursed.