EMP Calculation

POSTED BY Neeraj Mahajan ON August 28, 2013 4:01 pm ONE COMMENT


My name is Neeraj and have taken the loan from BOM of rs. 22 lakhs. It is communicated to me by the Bank Manager that the actual EMI i.e. 22600(approx) will start once the Moratorium period is Over. When I asked the bank manager that what if only 2 demands were made by the builder till the end of Moratorium period say Rs. 10 lakhs, Will the EMI be recalculated and I will have to pay the Principal and Intertest on rs. 10 lakhs instead of 22 lakhs. He replied No the EMI will be on the actual loan amount i.e. 22 lakhs. I was not convinced and asked couple of questions like what If builder stops the construction etc. but could not get any satisfactory reply.

He simply replied that similar process is followed in all the banks.

Is it Correct? If yes, then will I have to pay the intertest for the amount which has not been disbursed to the builder or only the principal amount will be deducted on the remaning amount i.e. 12 lakhs(22 lakhs-10 lakhs) ?




One reply on this article “EMP Calculation”

  1. Ashish Garg says:

    Hi Neeraj,

    As I understand, its a full EMI that you shall be paying even during the moratorium period. In such scenario, other banks consider the interest on loan disbursed and not the total amount. So for example:

    If the disbursement is Rs.10Lakh and monthly interest on this amount comes out to be say Rs.9600 then rest of the amount paid in EMI will be accounted for principal. This means your principal will will reduce by Rs.22600-9600 = Rs.13000., result next month your principal will be Rs.9,87,000 and so on. till you get full disbursement.

    Other way is to choose the interest payment installment, i.e., pay simple interest on the amount disbursed.


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