Rent vs Lease vs EMI

What is meant by Rent, lease & EMI as individual terms?



Rent is form of payment we do for the house owner for taking up the stay in his/her own house on monthly basis.

Lease is form of bulk payment we give it one shot to the house owner for a certain period of time, and he/she will pay back the amount once we vacate the home after the tenure period.

EMI, popularly known as Easy monthly instalment, in which we get huge bulk amount as lend to buy the property either as house or land, and we need to pay the debt in monthly basis, and as everyone would have been aware, interest will be charged for this principal amount, over the tenure/fixed period of time.

The more the tenure, the more interest it would be.

Eg: For a principal of 10L and 5% interest over a tenure of 20 years, in total you will be paying 15L altogether. But for the same principal and interest, if it was taken for leas tenure of 10 years, in total we pay 12L only.

Which one to prefer?

In the perspective of tenant,

 If you don’t have a bulk amount and you are not much sure of your monthly income-less job security, please do select the option of Rent, over which at worst time if your income is stopped, you can easily vacate the home, and stay in less rent for that specific hard period of time.

If you had some bulk amount but not much huge, say you have 4-5 L, you can easily go with lease pattern over which your amount is something considered as invested in safety bank with zero returns, provided the agreement and other documentation made legitimate between you and your house owner. The return here is accommodation/shelter rather than money.

If you had already got huge bulk amount of 10-15L or more than that, or  you are quiet confident that you can achieve the monthly EMI payment/ more job security, prefer to chose EMI as option, as in long run, once EMI is done, or the bulk amount is invested, the property will be completely under yours.

In the perspective of house owner,

If you are planning/ confident on trustworthy source of interest, you can get the bulk amount from tenant and yield it for interest in other sources, over which you can get more monthly returns compared to the rent if he/she pay.

But if you don’t find any trustworthy source to yield money for interest, and you are in a state that you might need your house at any time for personal life changes/requirements, agree with rent payment, so you can easily ask the tenant to move on and you no need to pay the amount back like lease pattern here.

If you are purchasing a property, with EMI make sure you  always have some one in the home/steady rent source, so that you will be confident to pay monthly EMI payments in any circumstances of life.


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