Interest-only payments made while an under-construction home is being built and the loan is released in stages.
How it works and what to check
For a flat under construction, the bank releases the loan in instalments as the builder reaches each stage. Until the full loan is out, you can pay only the interest on what has been released: that is pre-EMI. The full EMI, which also repays principal, starts after the final disbursement.
Pre-EMI keeps early payments low but does not reduce the loan, so the total interest is higher. Many lenders let you start full EMIs early instead.
Full EMI from the start costs less in total interest. Pre-EMI helps cash flow if you are also paying rent.
Does pre-EMI count for tax benefits?
Interest paid before possession can be claimed in instalments after completion under the old regime's rules. Check the current position with a tax adviser.