HDB Personal Loan EMI Calculator - Mar 2021

• Loan amount – This is the amount that you have borrowed from HDB Financial. If you apply for a higher loan amount, your monthly EMI will be high. HDB Financial gives a minimum loan of ₹ 1 Lakh, which can go upto an amount of ₹ 20 Lakh.
• Interest rate - Higher interest rate increases your loan EMI as well as the total cost of the loan. HDB Financial personal loan interest rate for salary account holders can be lower than their quote rates, which can reduce the overall cost of loan and EMI. Lowest interest rate offered by HDB Financial is 13.99%. However, it is advisable to do complete market research and compare rates online before you apply for a loan.
• Loan tenure – This is the period in which you can repay your loan in HDB Financial. Longer loan tenure means lower personal loan EMI. Generally, HDB Financial offers a loan for a maximum tenure of 5 years.

An amortization schedule is a table of periodic loan payments that shows the amount of principal and the amount of interest that comprise each payment until the loan is paid off at the end of its term.

In the Amortization schedule, your Personal Loan monthly EMI will be equal, but the component of EMI, which consists of interest payment and principal payment will not remain the same every month, it keeps on changing.

Illustration: How to read an amortization schedule

Suppose if you take a Personal Loan of ₹ 2.50 Lakh for 4 years at an interest rate of 10.40%. EMI calculated for this loan amount is ₹ 6,389 and the total annual EMIs to be paid annually is ₹ 76,665. The EMI schedule of loan for 4 years is explained below in the table –

Amortization Schedule for a Personal Loan of ₹ 2.50 Lakh over the 4 years

Year	Interest paid during the year	Principal repaid during the year	Total amount paid during the year (Interest + Principal)	Outstanding Principal
2021	₹ 19,981	₹ 43,906	₹ 63,888	₹ 2,06,094
Mar	₹ 2,167	₹ 4,222	₹ 6,389	₹ 2,45,777
Apr	₹ 2,130	₹ 4,259	₹ 6,389	₹ 2,41,519
May	₹ 2,093	₹ 4,296	₹ 6,389	₹ 2,37,223
Jun	₹ 2,056	₹ 4,333	₹ 6,389	₹ 2,32,890
Jul	₹ 2,018	₹ 4,370	₹ 6,389	₹ 2,28,520
Aug	₹ 1,981	₹ 4,408	₹ 6,389	₹ 2,24,112
Sep	₹ 1,942	₹ 4,446	₹ 6,389	₹ 2,19,665
Oct	₹ 1,904	₹ 4,485	₹ 6,389	₹ 2,15,180
Nov	₹ 1,865	₹ 4,524	₹ 6,389	₹ 2,10,656
Dec	₹ 1,826	₹ 4,563	₹ 6,389	₹ 2,06,093
2022	₹ 18,723	₹ 57,942	₹ 76,665	₹ 1,48,152
Jan	₹ 1,786	₹ 4,603	₹ 6,389	₹ 2,01,490
Feb	₹ 1,746	₹ 4,643	₹ 6,389	₹ 1,96,848
Mar	₹ 1,706	₹ 4,683	₹ 6,389	₹ 1,92,165
Apr	₹ 1,665	₹ 4,723	₹ 6,389	₹ 1,87,442
May	₹ 1,625	₹ 4,764	₹ 6,389	₹ 1,82,678
Jun	₹ 1,583	₹ 4,806	₹ 6,389	₹ 1,77,872
Jul	₹ 1,542	₹ 4,847	₹ 6,389	₹ 1,73,025
Aug	₹ 1,500	₹ 4,889	₹ 6,389	₹ 1,68,136
Sep	₹ 1,457	₹ 4,932	₹ 6,389	₹ 1,63,204
Oct	₹ 1,414	₹ 4,974	₹ 6,389	₹ 1,58,230
Nov	₹ 1,371	₹ 5,017	₹ 6,389	₹ 1,53,212
Dec	₹ 1,328	₹ 5,061	₹ 6,389	₹ 1,48,151
2023	₹ 12,402	₹ 64,264	₹ 76,665	₹ 83,888
Jan	₹ 1,284	₹ 5,105	₹ 6,389	₹ 1,43,046
Feb	₹ 1,240	₹ 5,149	₹ 6,389	₹ 1,37,897
Mar	₹ 1,195	₹ 5,194	₹ 6,389	₹ 1,32,704
Apr	₹ 1,150	₹ 5,239	₹ 6,389	₹ 1,27,465
May	₹ 1,105	₹ 5,284	₹ 6,389	₹ 1,22,181
Jun	₹ 1,059	₹ 5,330	₹ 6,389	₹ 1,16,851
Jul	₹ 1,013	₹ 5,376	₹ 6,389	₹ 1,11,475
Aug	₹ 966	₹ 5,423	₹ 6,389	₹ 1,06,052
Sep	₹ 919	₹ 5,470	₹ 6,389	₹ 1,00,583
Oct	₹ 872	₹ 5,517	₹ 6,389	₹ 95,066
Nov	₹ 824	₹ 5,565	₹ 6,389	₹ 89,501
Dec	₹ 776	₹ 5,613	₹ 6,389	₹ 83,888
2024	₹ 5,390	₹ 71,275	₹ 76,665	₹ 12,613
Jan	₹ 727	₹ 5,662	₹ 6,389	₹ 78,226
Feb	₹ 678	₹ 5,711	₹ 6,389	₹ 72,515
Mar	₹ 628	₹ 5,760	₹ 6,389	₹ 66,755
Apr	₹ 579	₹ 5,810	₹ 6,389	₹ 60,945
May	₹ 528	₹ 5,861	₹ 6,389	₹ 55,084
Jun	₹ 477	₹ 5,911	₹ 6,389	₹ 49,173
Jul	₹ 426	₹ 5,963	₹ 6,389	₹ 43,210
Aug	₹ 374	₹ 6,014	₹ 6,389	₹ 37,196
Sep	₹ 322	₹ 6,066	₹ 6,389	₹ 31,129
Oct	₹ 270	₹ 6,119	₹ 6,389	₹ 25,010
Nov	₹ 217	₹ 6,172	₹ 6,389	₹ 18,838
Dec	₹ 163	₹ 6,226	₹ 6,389	₹ 12,613
2025	₹ 164	₹ 12,613	₹ 12,778	-₹ 0
Jan	₹ 109	₹ 6,279	₹ 6,389	₹ 6,333
Feb	₹ 55	₹ 6,334	₹ 6,389	₹ 0

Each Personal Loan EMI consists of both amounts of interest as well as the principal repaid. The interest component of EMI goes down while the principal component goes up in both cases while doing the calculation.

In the above illustration, on a Personal Loan of ₹ 2.50 Lakh, taken at the lowest interest rate of 10.40%, EMI paid is ₹ 6,389 and an annual total of EMIs is ₹ 76,665, the interest component is ₹ 23,514 while the principal component is ₹ 53,152 in year 1 of loan disbursement. You repay only 21.26% of the total principal after paying 12 EMIs during the first year.

In year 4, the interest component of EMI is around 5.41%, while the principal component is around 94.59%. Upto 4 years, you have cumulatively repaid 100% of your total Personal Loan.

P*r* (1+r)^n/([(1+r)^n]-1)

Here is an illustration of how HDB Financial Personal Loan EMI is calculated:

In the above formula,

P = Loan amount. This can range from ₹ 1 Lakh to ₹ 20 Lakh

r = Rate of interest per month. Current rate is 13.99%

n = tenure in month. For HDB Financial, this can be 60 months

As a borrower, calculating right amount of EMI is a function of your loan requirement, your monthly income, repayment capacity as well as the amount of monthly instalment you can afford to pay out from your monthly income. As a guide, follow the below steps to estimate the EMI amount that is advisable for you.

• Decide the amount you need to borrow: It is important that before approaching a bank for loan, you need to estimate the amount of loan you need to borrow. Remember, a personal loan is an unsecured loan that can come at high interest rates and hence, it is advisable to limit your loan amount to the minimum required. Also, based on the EMI you can service, try to opt for the lowest tenure of loans as long tenure loans result in huge interest outgo.
• Review your current obligations: Before taking a loan, it is advisable to evaluate your current monthly expenses including any EMI obligations that you have on your current loan accounts. The assessment will help you to estimate the amount of EMI you can pay comfortably after taking into account other obligations. Once you arrive at the EMI you can service, you can also decide on the right loan tenure.
• Calculate your HDB Financial personal loan eligibility: Your loan eligibility is a function of an assessment of your repayment capacity based on your monthly income and other fixed obligations.
  
  • Multiplier based loan amount eligibility - HDB Financial calculates your loan amount eligibility by applying a multiplier to your net-take home salary. This is the simplest method for calculating loan eligibility used by banks. The formula used in the loan amount eligibility calculation is: Loan Eligibility = (Your Net Salary) x (multiplier of 9 to 18). The multiplier depends on the bank’s internal categorization of your employer company based on its reputation, stability, size, and growth in turnover.
  • FOIR based loan amount eligibility - HDB Financial will also estimate your Fixed Income to Obligations Ratio (FOIR) to ascertain the maximum EMI you can service based on your current income and other monthly expenses. The bank applies a certain ratio to your income to estimate your monthly expenses and then adds your other EMI obligations to calculate your fixed obligations. The proportion of fixed income to your calculated fixed obligations gives your FOIR. HDB Financial lends up to a maximum FOIR of 0.50. Based on the FOIR, the bank will also estimate the maximum amount of EMI you can service as a borrower. HDB Financial's assessment may be different from your assessment. Any differences in assessment may require you to readjust your loan amount requirement. You may also consider paying back other running short term loans to improve your eligibility.
  • HDB Financial will calculate your loan amount eligibility based on the above two methods and will sanction you a lower loan amount arrived at by the above two methods.

• Purpose of Loan: HDB Financial personal loan is taken to funding medical treatment in case of emergencies, paying additional debts, marriage expenses and other personal finance requirements.
• Key Features
  • Loan available for both salaried individuals and self-employed professionals.
  • Borrowers within the age group of 22 and 60 years.
  • Loan amount of minimum ₹ 1 Lakh to ₹ 20 Lakh.
  • Loan Tenure 1 to 5 years.
  • Interest rates in the range of 13.99% to 16.99%.
  • Lowest EMI of ₹ 2,326 per lakh.
• Processing Fees: Upto 2% of Loan Amount of loan amount. This is to be paid at the time of loan application
• Special schemes: HDB Financial offers customised personal loan interest rates and schemes for a special category of borrowers, including borrowers working in reputed companies, banks or government employees etc.

• HDB Financial personal loan calculator are online tools which give out EMI calculations using a combination of loan amount, interest rate and loan tenure.
• HDB Financial EMI calculator considers “reducing balance basis” and assumes that payment of EMI is made in arrears (means interest is charged for the month preceding the EMI payment date) and not in advance.

In case you prepay your personal loan, the outstanding balance on your loan reduces. In this scenario, HDB Financial will allow you to reduce your loan tenure or reduce your EMI. The right decision is dependent on you monthly budget and personal preference. You should opt to reduce your EMI if you want to have a higher monthly spend budget or you should opt to lower your tenure if you want to save on your total interest outgo and want to close your loan quickly. You can calculate the change in your EMI by inputting the outstanding personal loan amount from HDB Financial, the interest rate and the remaining tenure in the EMI calculator.

✅Why should I calculate HDB loan EMI before taking a loan?

It is advised to calculate personal loan EMI in advance before taking a personal loan. There are several benefits of calculating your HDB Financial personal loan EMI as discussed below -

• In case EMI comes out to be more than your monthly budget, then you have the chance to apply for a lower loan amount which fits your monthly budget and makes EMI easily affordable
• If you already know the EMI you have to pay each month, then you can plan your spends accordingly
• Based on the EMI amount, you can opt for making prepayment of your personal loan in future when you have surplus amount

✅What is the lowest EMI per lakh offered by HDB Financial on personal loan?

HDB Financial offers personal loan at 13.99% interest rate for a maximum of 60 months, and hence lowest EMI on per lakh loan amount is ₹ 2,326. However, HDB Financial may offer a lower interest rate and EMI for their salary account holders or existing bank customers can vary.

✅How can I pre close HDB Financial personal loan?

You can preclose your HDB Financial personal loan by visiting the branch with the required set of documents. Submit the form of preclosure, pay the amount and take the acknowledgement of balance amount that you have paid.

✅What are the prepayment charges on HDB Financial ?

HDB Financial offers you an option of prepayment after 6 months at Nil foreclosure charges.

✅Is there any processing charge on personal loan from HDB Financial?

Yes, HDB Financial charges a certain amount of processing fee to process your loan application. Currently, HDB Financial charges a processing fee of Upto 2% of Loan Amount on Personal Loan.

✅Will I get the personal loan from HDB Financial if i have a bad credit score?

No, for taking a loan from HDB Financial, an applicant must have a good credit score of 700 and above. Usually, most of the banks avoid giving loans if you have a low credit score.

✅How does a personal loan repayment happen?

The repayment of a personal loan happens in the form of an EMI (Equated Monthly Installment) through the customer's bank account. The customer is required to present a few post dated cheques and sign an ECS mandate in favour of the bank at the time of loan disbursal.

✅Can I have a co-applicant while applying for a Personal loan with HDB Financial ?

Yes, you can opt for a co-applicant to take a personal loan from HDB Financial that will increase your loan eligiblity as the income of the co-applicant is also taken into account.

✅Can we pay more than EMI in HDB Financial personal loan?

If you have funds, then you can pay more than the regular EMI on your loan. This will reduce your interest burden along with the outstanding principal. You can also pay one additional EMI every year to reduce loan tenure and in turn interest amount.

✅How can I pay my HDB Financial loan EMI?

You can pay the EMI on personal loan by using ECS facility or standing instruction. You can also visit the branch and submit the EMI cheque.