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When Does Home Loan EMI Start?

April 02, 2024
When Does Home Loan EMI Start?

Home loan EMI payments typically start after the full loan amount has been disbursed to the borrower.

Homeownership comes with its set of financial commitments, among which the Equated Monthly Installment (EMI) of a home loan is pivotal. Understanding when home loan EMI starts is crucial for effective financial planning and budgeting.

This article covers the specifics of home loan EMIs, including the concept of pre-EMI interest on housing loans, which affects the initial phase of loan repayment. We'll also explore strategies to manage your home loan EMI, making the dream of owning a home more financially manageable. Whether you're considering a home loan EMI or more, knowing when your EMI payments kick in and how to navigate them can significantly ease your financial journey.

Importance of Understanding the EMI Start Date

Understanding when your home loan EMI starts allows for precise budgeting and financial planning, ensuring you're prepared for regular repayments. It also aids in avoiding any surprises that could disrupt your financial stability. Knowing the EMI start date, especially if you're dealing with pre-EMI interest on housing loans, helps in making informed decisions about your cash flow management. By aligning your financial planning with the EMI schedule, you can ensure a smoother transition into homeownership, maintaining financial health while fulfilling your dream of owning a home.

Understanding the Home Loan Process

Let us look at the general steps involved in the home loan process. Different lenders may follow different procedures.

  • Complete the loan application form: Start by filling out the application form and attaching the necessary documents.
  • Pay the processing fee: Submit the required fee to process your application.
  • Financial institution consultation: Engage in discussions with the lender regarding your loan.
  • Document evaluation: The lending institution will assess the documents you've submitted.
  • Loan sanction: Await the lending institution's approval or sanction of your loan.
  • Offer letter processing: Review and process the loan offer letter from the lender.
  • Property paperwork: Submit your property documents for a legal check by the lending institution.
  • Technical check and site evaluation: The lender conducts a technical evaluation and site visit.
  • Finalizing the loan deal: Agree to the final terms of the loan.
  • Agreement signing: Sign the loan agreement with the lending institution.
  • Loan disbursement: The loan amount is disbursed, marking the completion of the process.

Importance of EMIs in Home Loan Repayment

EMIs serve as the structured approach through which borrowers return the loan amount plus interest to lenders. Calculating home loan EMIs in advance is essential, as it aids in determining the loan amount you can comfortably borrow, planning out your repayment strategy, and ensuring your financial planning is good. This methodical repayment helps in gradually reducing the loan balance, making the dream of homeownership achievable by breaking down the total cost into manageable monthly payments. Furthermore, consistent EMI payments help build a positive credit history, crucial for future financial opportunities.

When Do Home Loan EMI Payments Start?

Home loan EMI payments generally begin once the full loan amount has been disbursed to the borrower. In certain cases, there may be a moratorium period where the borrower is only required to make interest payments. This period is particularly helpful for those still constructing their homes or not ready to start full repayments.

After this moratorium period concludes, or if such a period isn't part of the loan agreement, borrowers must start making regular EMI payments. These payments include both the principal and interest components of the loan. Planning for these payments in advance is crucial for financial stability and ensuring a smooth repayment process.

How is your Final EMI Amount Decided?

The final EMI amount for a home loan is calculated using the formula:

EMI = P * r * (1+r)^n / [(1+r)^n−1],

where P is the principal amount,
r is the monthly interest rate (annual interest rate divided by 12),
and n is the number of monthly installments.

This formula helps you determine the exact EMI you'll pay, which is crucial for planning out your loan amount and repayment strategy.

Factors Influencing Home Loan EMI

  • Principal Loan Amount: The EMI amount is directly proportional to the principal loan amount. A higher principal loan amount will result in a higher EMI.
  • Interest Rate: The interest rate charged on the home loan significantly impacts the EMI amount. A higher interest rate leads to a higher EMI, while a lower interest rate results in a lower EMI.
  • Loan Tenure: The duration for which the home loan is taken, known as the loan tenure, affects the EMI amount. A longer loan tenure reduces the monthly EMI but increases the total interest paid over the loan term.
  • Credit Score: A borrower's credit score plays a crucial role in determining the interest rate offered by lenders. A higher credit score can result in a lower interest rate and, consequently, a lower EMI.
  • Financial Stability: Lenders consider the borrower's financial stability, including income and debt-to-income ratio, when determining the final EMI amount. A stable financial profile may lead to a more favorable EMI.
  • Down Payment: The amount of down payment made by the borrower can impact the EMI amount. A higher down payment reduces the principal loan amount, resulting in a lower EMI.

Factors Influencing EMI Start Date

  • Loan disbursement date: EMIs typically begin after the lender disburses the entire loan amount to you.
  • Moratorium period: Some home loans come with a moratorium period during which you may not be required to pay the principal on the EMI, only the interest.
  • Pre-EMI interest on home loans: If you opt for this, you'll pay interest on the part-disbursed loan amount, usually applicable during the property's construction phase
  • Construction-Linked payment plan vs. ready-to-move-in property: For under-construction properties, EMIs usually start after construction is completed. For ready-to-move-in homes, EMIs start almost immediately after the full disbursement.

Understanding these elements helps you anticipate when you need to begin budgeting for EMI payments, aligning with your financial planning.


Understanding when home loan EMI starts, whether due to loan disbursement, moratorium periods, pre-EMI interest on home loans, or the type of property, is crucial for financial foresight. Knowing these details allows you to align your budget with upcoming financial responsibilities.

If you're looking to take this significant step towards homeownership, SMFG Grihashakti is here to guide you through the process with transparency and support. We offer tailored home loan solutions to fit your individual needs. Connect with us to find out how we can help you set the stage for a financially secure future on the rewarding path to owning a home.

FAQs on Dholera Smart City Project

Is the EMI start date the same as the loan disbursal date?

No, the EMI start date is not necessarily the same as the loan disbursal date. It depends on the terms of the loan and whether there's a moratorium period.

Can I choose the EMI start date for my home loan?

The start date for your home loan EMI is typically set after the loan is fully disbursed. However, if there's a moratorium period, which acts as a waiting time before regular EMIs kick in, or if you opt for a construction-linked plan, the start date may be deferred. It's also affected by the readiness of the property, whether it’s under construction or ready for occupation.

What factors determine the EMI start date for a home loan?

The start date for your home loan EMI is determined by several key factors: the loan disbursal date, whether a moratorium period is included, and the nature of the property being financed, such as whether it's under construction or ready for occupation

Will the EMI start immediately after loan approval?

No, the EMI typically starts once the entire loan amount has been disbursed, not immediately following loan approval. This delay is particularly relevant if your loan agreement includes a moratorium period, which allows for a grace period before the start of actual EMI payments.

Can I postpone the EMI start date if needed?

You can discuss postponing the EMI start date with your lender; it may be possible with construction-linked plans or under specific loan terms.

How does the EMI start date affect the overall cost of the loan?

The timing of your EMI start date has a direct impact on interest accrual. A delayed commencement might lead to increased interest paid over the loan's tenure, as pre-EMI interest on home loans accumulates during this period.

What should I do if there is a delay in the EMI start date?

If there's a delay in the EMI start date, contact your lender to understand the reason and the implications it may have on your loan.

Can I make pre-EMI payments before the regular EMIs begin?

Yes, it's possible to make pre-EMI payments before the onset of regular EMIs. These payments specifically cover the interest that accrues between the initial loan disbursal and when full EMI payments commence. Opting for pre-EMI payments can be a strategic move to manage financial flow, especially during the construction phase of a property, easing the transition into regular repayment schedules.

Disclaimer: *Please note that this article is for your knowledge only. Loans are disbursed at the sole discretion of SMFG Grihashakti. Final approval, loan terms, disbursal process, foreclosure charges and foreclosure process will be subject to SMFG Grihashakti’s policy at the time of loan application. If you wish to know more about our products and services, please contact us.

SMFG India Home Finance Co. Ltd. (Formerly Fullerton India Home Finance Co. Ltd.)
CIN number: U65922TN2010PLC076972

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