EMI is calcuated on total loan amount approved and not on actual loan taken.

POSTED BY Ameya Inamdar ON February 19, 2013 10:28 am COMMENTS (10)

I have taken home loan from SBI, BKC Branch in April 2011. The total approved amount was Rs. 38,88,000/- on which the EMI was calculated Rs. 34,359/-. But i managed to pay the builder from my pocket and the actual loan taken from the bank eventually was Rs. 34,17,540/-.


I had taken a lesser amount of Home loan than the sanctioned amount yet the EMI i am paying is on the sanctioned amount and has not been revised. I had sent mail to the bank but they have not responded.  


Is this correct or is it error from their part? also if i make part pre-payment of say Rs. 5000/- every month apart from my EMI. WIll the pre payment amount reduce my Principal amount and duration of loan? 


Kindly help.



Ameya Inamdar  

10 replies on this article “EMI is calcuated on total loan amount approved and not on actual loan taken.”

  1. Dear Ameya, I have already received & ‘ll answer you in detail there.



  2. Ameya Inamdar says:

    Dear Mr. Ashal, I have mailed account statement of my home loan to your gmail id.
    Trust you have received it.

    Thanks again.


  3. Ameya Inamdar says:

    OK. Will mail you my account statement shortly.

  4. Dear Ameya, I’ll wait for your soft copy. Alternatively, you may download your account statement of home loan, if you do have netbanking facility & mail me the same.



  5. Ameya Inamdar says:

    No. EMI started a month later.

  6. Dear Ameya, what about Moratorium? Was there any?



  7. Ameya Inamdar says:

    Dear Mr. Ashal,

    I had got approval on the loan amount in Mar-April 2011 and EMI started in July 2011. Possession was in Dec 2011, also Dec we got final 1.5 lakh payment from the bank since bank makes the final payment to the builder before possession. i will try and mail you the softcopy of my account statement. Being SBI there responses aren’t very prompt.

    Thanks for the support.


  8. Dear Ameya, As you applied for 38.88L Rs. loan & used only 34.17L Rs. Had you applied to bank for settle the lower amount to be treated as loan?

    Can you share from when you are paying EMI? when did you get the possession of your house? Was there any moratorium in your home loan?

    If you feel the language too much technical for you, don’t worry, please your SBI branch to provide your till date loan account statement in soft (PDF or Exl) & e-mail me the same & I ‘ll check it for you, what’s hapening in your home loan?



  9. Ameya Inamdar says:

    Thank you for your response sir.
    While i dont mind paying higher EMI but then how would i know how many years i have managed to reduce my paying term?

    The account statement they shared with me was way too complicated for me to understand and it seems i have only paid Interest…hardly any money has gone from my principal amount.


  10. Biswa Singh says:

    Yes EMI is fixed when bank approve the loan. Now its your own wish how much you are going to disburse and also there is no way for a bank to know how much your are going to disburse and accordingly fix the EMI. But i dont think any issue you pay high EMI then you will close your loan early also.

    Pre-payment reduces the principal amount.

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