Taking the first step towards owning a home is an exciting journey, albeit one that comes with its share of financial considerations. A key aspect of this process is knowing when your Home Loan EMI begins, which is essential for planning your budget effectively.
What triggers the start of your Home Loan EMI?
The commencement of your Home Loan EMI is a significant event in the home-buying process, marking the point where you start paying back the loan you've taken to purchase your property. Here’s a detailed look at what triggers the start of your Housing Loan EMI:
Loan disbursement
Your Home Loan EMI typically starts after the loan amount is fully disbursed to the builder or seller. This is the most common trigger for the commencement of EMI payments.
1. Full disbursement: When your Home Loan is fully disbursed, this means that the lender has paid out the entire loan amount agreed upon, either to you or to the property seller. The timing of your first Home Loan EMI is directly linked to this disbursement. For instance, if the loan amount is disbursed in April, your EMI would generally begin in May.
2. Progressive disbursement: In the case of under-construction properties, the disbursement of your Home Loan might occur in stages, based on the completion milestones of the construction. Although EMIs typically start after the full loan amount has been disbursed, you might be required to pay interest on the portion of the loan that has been disbursed — a payment often referred to as pre-EMI.
Pre-EMI
When considering "when does Home Loan EMI start after disbursement," it's important to note that you can opt for pre-EMI payments. Pre-EMIs are interest payments on the loan amount disbursed so far. Full EMI payments, which cover both principal and interest, commence only after the entire loan amount is disbursed.
Example: If you have taken a loan for a property that is still under construction, and ₹10,00,000 has been disbursed from a total ₹50,00,000 loan, you might choose to pay pre-EMI on the ₹10,00,000 until the rest of the loan is disbursed.
Essential documentation for Home Loan approval and disbursement
Securing a Home Loan requires meticulous documentation, which influences the approval process, the disbursement of the loan and the commencement of your EMI payments. Here's an overview of the documents required for Home Loan:
Identification and address proof
- Valid government-issued ID (passport, driving licence, Aadhaar card)
- Recent utility bills or passport for address verification
Financial documentation
- For salaried: Recent payslips, Form 16 and 6 months of bank statements
- For self-employed: Recent tax returns, profit and loss statements and business bank statements
Credit score and property documents
- Credit score report to influence Home Loan rates
- Legal property documents, including title deeds and no-objection certificates
Proof of financial stability
- Employment verification for salaried, business existence proof for self-employed
- Evidence of down payment made towards the property
Also Read: Overview, stages & claim limit in Home Loan disbursement process
Conclusion
Understanding when your first EMI starts for your Home Loan is a pivotal step in planning your financial future after purchasing a property. With clear timelines and processes in place, you can better prepare for the financial responsibilities that come with homeownership.
Axis Bank Home Loans offer flexible solutions with competitive interest rates, extensive loan amounts up to ₹5 crore, and convenient repayment tenures up to 30 years. With features like easy application processes and doorstep service, securing a Home Loan from Axis Bank can make achieving your dream of homeownership simpler and more achievable. Choose Axis Bank to ease your journey into your new home, starting with a well-planned EMI schedule that fits your financial planning.
Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.
