Hi , i have a taken a loan amount of 20 lakh rupees from axis bank. The building is under construction and is expected to complete by only 2015. For the last 10 months pre emi was being deducted and it was informed that the amount is a part of the interest amount of loan .
But from online research, I learnt that this amount is an extra amount and actual interest is paid when emi starts. On communication with axis bank , they have confirmed that the current amount paid through pre emi process belongs to interest but it can be considered as an interest part of the EMI process by doing a part payment of the principal amount against the interest paid for last 10 months.
So i would like to get some help from you all to clear some of my confusions. Lets consider the case where in principal is 20 lakhs and interest is also 20 lakhs at the start of the loan. so
1. Is pre emi an extra amount paid ? ie , is it something extra to the 40 lakhs or does it include in the 40 lakh.
2. If i do part payment of principal amount, will the interest against that much amount come down ?? ie if i make a part payment of 5 lakh , will my interest also come down by 5 lakh or i still need to pay the interest amount of 5 lakh?
Sorry for my limited knowledge . Hope you will understand and help me out.