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How pre-EMI was calculated
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July 03, 2006

Note on computation of average Pre-EMI interest of Rs 9,961

Most Home Finance Companies restrict the total number of partial disbursements to four or six.

However, for simplicity purposes, we have assumed that disbursement takes place at the beginning of each month.
Total amout to be disbursed is Rs 27,00,000 over 24 months.
On an average, Rs 1,12,500 will be disbursed every month. 

Month

Loan at the start of the month (Rs)

Loan disbursed
during the month (Rs)

Interest
payable for the month (Rs)

Loan at the
end of the month (Rs)

1

                 -  

              112,500

          797

        112,500

2

        112,500

              112,500

       1,594

        225,000

3

        225,000

              112,500

       2,391

        337,500

4

        337,500

              112,500

       3,188

        450,000

5

        450,000

              112,500

       3,984

        562,500

6

        562,500

              112,500

       4,781

        675,000

7

        675,000

              112,500

       5,578

        787,500

8

        787,500

              112,500

       6,375

        900,000

9

        900,000

              112,500

       7,172

      1,012,500

10

      1,012,500

              112,500

       7,969

      1,125,000

11

      1,125,000

              112,500

       8,766

      1,237,500

12

      1,237,500

              112,500

       9,563

      1,350,000

13

      1,350,000

              112,500

      10,359

      1,462,500

14

      1,462,500

              112,500

      11,156

      1,575,000

15

      1,575,000

              112,500

      11,953

      1,687,500

16

      1,687,500

              112,500

      12,750

      1,800,000

17

      1,800,000

              112,500

      13,547

      1,912,500

18

      1,912,500

              112,500

      14,344

      2,025,000

19

      2,025,000

              112,500

      15,141

      2,137,500

20

      2,137,500

              112,500

      15,938

      2,250,000

21

      2,250,000

              112,500

      16,734

      2,362,500

22

      2,362,500

              112,500

      17,531

      2,475,000

23

      2,475,000

              112,500

      18,328

      2,587,500

24

      2,587,500

              112,500

      19,125

      2,700,000

Total

           2,700,000

    239,063

 

Total interest paid over 24 months is Rs 2,39,063. Average interest paid per month is Rs 2,39,063/24 = Rs 9,961.


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