EMI in Advance is a loan repayment option where you pay the first EMI at the time of loan disbursement, not after one month like in regular EMI plans. Instead of receiving the entire loan amount, the lender deducts one EMI upfront and gives you the remaining balance.

How It Works:

Let’s say you take a loan of ₹1,00,000 with an EMI of ₹10,000. Under the EMI in advance option, the bank will deduct ₹10,000 immediately and disburse ₹90,000 to your account. Your loan tenure still begins right away, and your next EMI will be due after one month.

Key Highlights of EMI in Advance:

  • First EMI is prepaid at loan disbursal.

  • You receive a lower loan payout (sanctioned amount – first EMI).

  • Interest is charged on the full loan amount, not the disbursed amount.

  • Common in personal loans, car loans, and consumer loans.

Why It Matters:

This method helps lenders reduce risk, but as a borrower, you must plan for the lower disbursed amount. Always compare this with EMI in arrears (where EMI starts after 30 days) to understand which suits your budget better.