Moratorium period or Full EMI from First day ?

POSTED BY skiskuflat ON February 26, 2014 9:00 am COMMENTS (4)

hello….i had applied 21 lac loan to SBI WHICH ALREADY SANCTIONED…..MY FLAT IS UNDER CONSTRUCTION…TENURE IS 23 YRS.SBI GIVEN ME MORATORIUM OF 12 MONTHS….NOW MY CONFUSION IS WHETHER I SHOULD GO FOR MORATORIUM PERIOD OR FULL EMI FROM D FIRST DAY…….my confusion is whether i have to make pay a large amount excess if i opt for moratorium

4 replies on this article “Moratorium period or Full EMI from First day ?”

  1. ashalanshu says:

    Dear Raja, in case of SBI, interest is charged only on the disbursed amount. I can not comment for other banks. 🙂



  2. Raja says:

    Ashal, full EMI in case of ADF will mean interest on the entire loan amount from day 1 even if construction is at 10% completion. ADF and EMI under construction must be differentiated here. Both have full EMIs but the interest calculation is different.

  3. ashalanshu says:

    Dear Skiskuflat, please opt full EMI from day one. The interest ‘ll be charged only on trhe disbursed amount. The remaining amount ‘ll be counted as principal part an thus you ‘ll be able to repay early if it’s a term loan. In case of Max Gain, only the basic part of principal as per your loan amortization schedule ‘ll be adjusted and remaining amount ‘ll become part of your available balance and it ‘ll help you to save on interest outgo.

    So in any type of your loan from SBI, full EMI from day one is a good idea.



  4. Raja says:

    Go for construction linked EMI. Full EMI will start, but you will pay interest only on the amount disbursed. This will help you in repaying more interest during construction stage itself

    E.g. If loan is 25L and considering that EMI comes to 25,000 per month

    1) If Pre-EMI is paid till possession and EMI after that
    You will pay simple interest on the amount disbursed till you decide to start full EMI

    2) If ADF is taken and full EMI is started from beginning
    You will pay full EMI and interest will be calculated on full 25L from day 1

    3) If EMI under construction is chosen and full EMI is started from beginning
    You will pay full EMI but interest will be calculated only on the amount disbursed. The rest of the EMI component will be principal.
    E.g. If only 5L is disbursed, you will pay interest on 5L which may come to say 4000 Rs and the rest Rs. 21000 will be principal. So principal will be repaid more during construction phase.

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