How is an EMI calculated?

Equated Monthly Installment, simply known as EMI is the amount payable, every month, to the institu

l x r [(1+r)^n /(1+r)^n-1 ]

(l = loan amount, r = rate of interest, n = term of the loan)

• What is a ‘fixed rate of interest'?

Certain institutions lend out money at a fixed rate of interest, i.e., the rate at which interest

• What is a ‘floating rate of interest’?

As the term ‘floating’ suggests, this rate of interest fluctuates according to the lending rates

• On what factors does the amount loaned out by a housing finance company depend?
Typically, a maximum of 85% of the cost of the property in question is loaned out to the app

• What is the appropriate time to apply for a home loan?

You can apply for your home loan either before or after selecting the desired property. Once

• Typically, what is the time required for a loan application to get approved?
The loan application approval usually takes 0-15 days.

• What documents do I need to verify before purchasing a property?

For the purpose of purchasing a property, it is essential that you see the approved layout pl

• I want to buy a flat. What documents should I verify before going ahead with the purchase?
A thorough title and document search needs to be completed with the help of a competent

• What is the meaning of the terms ‘carpet area’, ‘built up area’ and ‘super built up area’?
Carpet area is the area of the apartment/building, which does not include the area covered

• Who pays Stamp Duty for a property – the buyer or the seller?
As per Section 30 of the Bombay Stamp Act, 1958, the buyer is liable to pay the required st

• What is the ‘market value’ of a property?

Market value is nothing but the price at which a property can be bought in the open market

• Do I need to pay Stamp Duty on the market value or as stated in the agreement?
Yes. Stamp Duty is required to be paid at the rate which is stated in the agreement value of

• Which instruments are eligible for the payment of Stamp Duty?

The instruments on which Stamp Duty is levied on market value of the property are:

- Agreement to Sell 
- Conveyance Deed 
- Exchange of property 
- Gift Deed 
- Partition Deed 
- Power of Attorney settlement and Deed 
- Transfer of lease
month, to the institution lending out capital to you, till the loan is paid back in full. Each monthly instalment com

ate at which interest is calculated on the borrowed sum, remains the same throughout the entire period of the

g to the lending rates prevalent in the market at the time. Consequently, you risk of paying more than you budg

loaned out to the applicant. The rest of the 15% (seed money) will have to be provided by the loan applicant. T

esired property. Once the loan is sanctioned in principle, you know for certain what amount you have at your di

e approved layout plan, approved building plan, ownership documents, carryout search, and other such legal d

e purchase?
help of a competent advocate before you purchase a flat.

up area’?
de the area covered by the walls. The term built up area includes the area of the walls along with carpet area. T

o pay the required stamp duty unless agreed otherwise.

t in the open market on a particular date, when the instrument in question is executed.

e agreement value of the property or the market value, whichever is higher.

property are:
onthly instalment comprises a portion of the interest as well as the principal. EMI is calculated using the formul

entire period of the loan. As a result, you do not gain or lose, if rates fluctuate.

g more than you budgeted for, just in case the market lending rates shoot.

the loan applicant. The loan amount for various applicants differs on the basis of age, income, no. of dependen

t you have at your disposal. This in turn helps you decide your budget. However, it is only after satisfactory veri

nd other such legal documents.

ng with carpet area. The term super built up area is applicable exclusively to multi-dwelling units and includes t
ted using the formula: 

me, no. of dependents, monthly outgoing and repayment capacity.

after satisfactory verification of all necessary documents and procedures that the actual disbursement of the loa

g units and includes the area under common spaces such as the lobby, lifts, stairs, etc along with the built up ar
sbursement of the loan takes place.

g with the built up area.

E= p x r x (1 + r)n / ((1+r)n -1)
Here p=principal amount
r = interesr rate per month(ex: if interest rate per annum is 10% then 10/(12*100))
n= tenure in months

Loan Amount - In Rs.###

Loan Term - In Months120
Rate of Interest (in 8.00%
%)

EMI ###