Hi Ashal/Manish,
Please give your openion on the below.
I am going to take a loan of 30,00,000 form SBI Max gain. I think I will be able to repay the laon in coming 5 years. I have opted for Pre-emi option because I don’t want to be in cash crunch for coming 2 years i.e. until possession. Here is what i understood of pre-emi:
‘If bank disburses 5,00,000 then I will pay only interest for 5,00,000 that is the disbursed amount. Going forward when bank disburse another 5,00,000 then i will pay interest on 10,00,000. This will continue until i get the possession. So if it takes two year to get possession then i have to pay 2 years of extra interest additionally. After my possession the full EMI will start.”
In SBI the pre-emi is calculated using the formula 30,00,0000 * 30 * 0.105 / 365 = 25,890 (10.5% is the interest rate). This amount is the fixed pre-emi that i have to pay to bank until i get possession and my full emi starts after the possession.
Below is a calculation that I have done:
First Disbursment 5,00,000
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Total Loan Amount = 5,00,000
1st Month
Interest = 5,00,000 * 0.105 / 12 = 4,375
Prinicipal = 25,890 – 4,375 = 21,515
Remaining Loan Amount = 5,00,000 – 21,515 = 4,78,485
2nd Month
Interest = 4,78,485 * 0.105 / 12 = 4,187
Prinicipal = 25,890 – 4,187 = 21,703
Remaining Loan Amount = 4,78,485 – 21,703 = 4,56,782
3rd Month
Interest = 45,6782 * 0.105 / 12 = 3,997
Prinicipal = 25,890 – 3,997 = 21,893
Remaining Loan Amount = 4,5,6782 – 21,893 = 4,34,889
Second Disbursment 5,00,000
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Total Loan Amount = 5,00,000 + 4,34,889 = 9,34,889 (Added Remaining principal carried over from previous disbursement)
1st Month
Interest = 9,34,889 * 0.105 / 12 = 8,180
Prinicipal = 25,890 – 8,180 = 17,710
Remaining Loan Amount = 9,34,889 – 17,710 = 9,17,179
2nd Month
Interest = 9,17,179 * 0.105 / 12 = 8,025
Prinicipal = 25,890 – 8,025 = 17,865
Remaining Loan Amount = 9,17,179 – 17,865 = 8,99,314
3rd Month
Interest = 8,99,314 * 0.105 / 12 = 7,869
Prinicipal = 25,890 – 7,869 = 18,021
Remaining Loan Amount = 9,17,179 – 18,021 = 8,99,158
Observations
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– I am paying both the interest component as well as principal component.
– The pri-emi amount is fixed during the pre-emi period.
– The pre-emi is approximately 70% of the actual emi.
– Interes amount decreases in a disbursement cycle.
– Principal amount increases during a disbursement cycle.
Manish,
Please find below the link of the wealth management compy through which i have applied home loan.
http://akshayawealthadvisers.com/