What “starting date” should I choose for my Home loan EMI ?

POSTED BY asksahil ON December 24, 2013 10:13 am COMMENTS (5)

Hi,

I have taken a home loan from ICICI bank. The loan disbursement date is 31st Dec 2013.

Now, they are asking me

When should EMI date be schedule

1st or 5th or 10th?
These are options.
A) If EMI is of 1st of every month then only for 1 day interest applicable you have to pay.
1st EMI will get debited from your a/c on 1st Feb.2014.
B) If EMI is of 5th of every month then only for 6 days interest applicable you have to pay.
1st EMI will get debited from your a/c on 5th Feb.2014.

C) If EMI is of 10th of every month then only for 10 days interest applicable you have to pay.
1st EMI will get debited from your a/c on 10th Feb.2014. ”
I wish to know what does “1 day/6 days/10 days interest applicable” mean. Why isnt first emi scheduled on 31 Jan 2014 instead of Feb? Is there something fishy?
Please let me know. Thank you.

5 replies on this article “What “starting date” should I choose for my Home loan EMI ?”

  1. ashalanshu says:

    Dear Rahul, it’s alright. I was asking to correct myself if I had erred anything?

    Thanks

    Ashal

  2. rahul123 says:

    Dear Ashal,

    You are right, bank will never forgive the interest.

    My point was, for a person who is not good in finance it looks he/she is paying no interest (for few days) as their emi is from 5/10/15. If (we assume ) this perceived logic is correct, then also there is no big advantage. As the emi cycle will repeat and bank will take interest in the monthly cycle.

    I should have put my explanation in a better manner. Thanks for correcting me.
    Thanks,
    Rahul

  3. ashalanshu says:

    Dear Rahul, where is the advantage of no interest in the above scenario?

    Thanks

    Ashal

  4. rahul123 says:

    You will get advantage of no interest for few days for initial month only. After that the cycle will repeat…

    Thanks,
    Rahul

  5. ashalanshu says:

    Dear Asksahil, as the disbursement is happening on 31st Dec, for Jan 2014, the interest ‘ll be charged only for the days to EMI date. Regular EMI ‘ll start from Feb 2014. Nothing fishy in it.

    Thanks

    Ashal

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