What is Pre EMI & Full EMI?

28 May, 2024

Synopsis

• Home Loans help you purchase property despite their high rates.

• You can repay such loans in EMIs which are categorised into 2 types: pre-EMI and full EMI.

• You can easily repay your loan EMI’s through HDFC Bank’s PayZapp app.
  
  

Dreaming of owning a home in the near future? It can be a very rewarding experience. However, there are some things that you should be aware of before even taking a first step towards home ownership. What are pre-EMIs? What are full EMIs? Which should you choose, and how do you even pay them? In this article, we will help you understand your options, and show you just how easy it is to make any EMI payment via Payzapp from HDFC Bank.

Understanding Pre-EMI and Full EMI:

• What is Pre-EMI?
  
  Pre-EMI, short for Pre-Equated Monthly Instalment, is a concept primarily associated with under-construction properties or properties still in the development phase. When you avail a loan for such properties, the disbursal of the entire loan amount does not happen upfront. Instead, it occurs in parts or stages, corresponding to the progress of the construction. During this period, as a borrower you are required to pay only the interest accrued on the amount disbursed, rather than the principal amount. This interest payment is what constitutes the pre-EMI.
  
  

• Full EMI 
  
  Full EMI refers to the regular Equated Monthly Instalments you, as the borrower, need to pay once the entire loan amount is disbursed. These EMIs comprise both, the interest and principal components and continue until the loan is fully repaid. Full EMIs typically commence after the property construction is complete and the borrower has taken possession.
  
  

Pre-EMI vs Full EMI

The fundamental difference between full EMI vs pre-EMI lies in the timing and composition of payments. Pre-EMIs are temporary, involving only interest payments on the disbursed loan amount during the construction phase. Conversely, full EMIs encompass both interest and principal repayments and continue for the duration of the loan tenure.

Benefits of Pre-EMI

Following are the main benefits you can enjoy when you opt for pre-EMIs:

• Lower Initial Burden
  
  Pre-EMIs are usually lower than full EMIs as they involve only interest payments. This can ease your financial burden during the construction phase when you don’t have full access to the property.

• Investment Option
  
  In a scenario where the margin between the EMI and pre-EMI is substantial, you can look at investing the difference amount and earn returns from it till your regular EMIs start.
  
  

Benefits of Full EMI

Here’s how opting for Full EMIs proves advantageous:

• Faster Principal Repayment 
  
  With full EMIs, you start repaying the principal amount along with interest from the beginning, accelerating the equity buildup in the property.
  
  

• Reduced Interest Outgo
  
  Since full EMIs cover both principal and interest, you end up paying less interest over the loan tenure compared to pre-EMIs, where interest payments are made on a reducing balance.
  
  

How PayZapp Simplifies EMI Payments

PayZapp Online Payment App streamlines the process of paying EMIs, whether they are pre-EMIs or full EMIs. Here is how:

• Convenience: PayZapp allows you to set up auto-payments for your EMIs, ensuring timely payments without the hassle of manual transactions.

• Secure Transactions: With advanced security features, including multi-level encryption and secure PIN authentication, PayZapp ensures that EMI payments are conducted safely.

• Reward Points: As a PayZapp user you can earn reward points on your EMI payments, which can be redeemed for various offers and discounts, enhancing the overall value proposition.

• Accessibility: PayZapp is accessible 24/7, enabling you to make EMI payments anytime, anywhere, using your smartphones, thus adding to the convenience factor.
  
  

Click here to make upi payment through PayZapp on your IOS phone.

Click here to download PayZapp UPI Payment App on your Android phone.

How To Pay Your Full EMI or Pre-EMI on PayZapp
​​​​​​​

You can pay your EMIs easily on PayZapp by following the steps mentioned below:

1. Login to PayZapp with your thumb or finger impression.

2. Go to the ‘Bills and Recharges’ menu, select ‘Financial Service’ and click on ‘Loans’

3. Choose your loan provider from the drop-down menu on PayZapp.

4. Enter your loan account number and you will be able to see the loan details.

5. Choose your preferred payment method to pay your next due EMI or pre-EMI.

PayZapp also gives you the option to set up recurring loan payments. In additionyou can track your EMI payments through PayZapp’s ‘Passbook’ section. Here, you can maintain a record of your online EMI payments and use various filters and instantly search for your previously paid EMIs.

Understanding the difference between pre-EMI vs full EMI can help you plan your finances as your prepare to purchase a home. With PayZapp from HDFC Bank you can experience convenience, security, and rewards while simplifying the process of planning and making your EMI payments.

Schedule your EMI payments easily – Download PayZapp today!

*Disclaimer: Terms and conditions apply. The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances.