What is Advance Disbursement Facility (ADF) & Pre-EMI?
ADF is payment of complete amount of home/office… upfront and once. While Pre-EMI is disbursement of partial loan amount to the Promoter at various stages of construction as agreed.
EMI; In ADF the EMI starts from the month the payment is dispatched along with principal component. While in Pre-EMI, only interest is levied till the final tranche of disbursement is released to the Promoter.
Various Promoters are offering to pay up the interest amount till the possession in both cases. But generally speaking, the Buyer ends up paying more in case of Pre-EMI as principal component is nil till the final tranche of disbursement.
In case of Pre-EMI if the Buyer has not availed of the scheme of payment from Promoter and when the project gets delayed beyond the stipulated time, then duration of payment (months) will be extended but the duration shall not be hampered in the case of ADF. Moreover, the interest paid before the possession shall not be tax exempted as per Indian Income Tax Act.
This may sound like ADF is all-weather good than Pre-EMI but there can be threats of whole amount being stuck with Promoter when the Project gets stalled.
Looking for more such advice? Or, RERA consultation on your new home? Contact us today!
The information relayed in this blog should not be construed as legal advice. The applicability of information varies on the basis of the circumstances of each case. But feel free to call us for similar advice.
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