Hello,
I have opted for HDFC Home Loans @ 10.5% and this month on July 21st took the first disbursement of Rs 374000.
Now, my ECS cycle begins from the 4th of consecutive month. So HDFC said that since there are 9 days pending for the month to close, I would have to pay simple interest ( which on the receipt is termed as PreEmi) amounting to Rs 1185. Now I think that’s fine.
My EMI calculation will being from Aug 1st to Aug 31st and the first EMI will be debited on 5th Sept.
Now, comes the confusion.
HDFC says that I have to pay the PreEMI calculated through simple interest every time I come to collect the next disbursement cheque, and that too on the cumulative amount.
What I don’t understand is since my EMI has started why should I pay “interest” twice on the same amount, once in cheque and again through ECS?
Also, they have failed to explain how this “Pre-EMI” is calculated and how it adds up against the recovery of my loan amount.