Home Loan: To have a sweet home is the dream of everyone, and probably buying a home is one of the largest purchases of a person’s life. Besides dreams, it is also true that most people do not have that much collective savings to buy a home. That is where Home Loan comes into play.
In tier 1 and Tier II cities of India, people enjoy the benefits of home loans to buy their dream homes. The scope of home loans is increasing rapidly from metro cities to small towns, so having insight into several components of home loans would help you to choose a plan easily and wisely.
Let’s have a look at several components of a home loan
EMI
EMI stands for Easy Monthly Instalments, it allows customers to pay principal money along with interest in monthly instalments.
Flexibility in EMI
Some home loan lenders allow borrowers to pay EMIs flexibly. It means The monthly repayments are unequal. In step-up flexible EMIs, initially, the amount of monthly instalments remains low and increases on a rolling years basis.
Similarly, step-down repayment EMIs allow borrowers to pay high amounts in instalments initially and it will be lower with years rolling.
Pre- EMI interest
Sometimes home loan instalments depend upon the stages of completion of a housing project. In this case, borrowers need to pay interest of that stage duration only. This kind of interest is known as pre-EMI interest.
