HDB Personal Loan EMI Calculator - Jan 2019

Personal Loan EMI Calculator HDB

HDB Financial Personal Loan EMI

• Personal Loan EMI (or equated monthly instalment) is a fixed amount of money paid by you to HDB Financial against the loan taken. This is towards repayment of your loan to the bank. Every month, it is due on a fixed day of the month till your loan is fully paid back.
• HDB Financial offers affordable and convenient personal loans with loan EMIs as low as Rs. 2,326 per lakh for a 60 tenure and lowest rate of interest on personal loans at 13.99%.

Personal loan EMI calculator at different tenures

Personal Loan EMI for different loan amounts and tenures @ 13.99% interest rate

Loan Amount (Rs.)	2 Years	3 Years	5 Years
1 Lakh	Rs. 4,801	Rs. 3,417	Rs. 2,326
3 Lakh	Rs. 14,402	Rs. 10,252	Rs. 6,979
5 Lakh	Rs. 24,004	Rs. 17,086	Rs. 11,632
10 Lakh	Rs. 48,008	Rs. 34,173	Rs. 23,263

• From the above table, it can be interpreted that for various loan amounts taken at the lowest interest rate, EMI differs for loans taken at different tenures. Your EMI is higher when you take a loan for a shorter tenure of 2 years and is higher for a longer tenure loan of 4 years.
• Each EMI includes a component of interest payment and principal repayment. Even as EMIs remain constant, every month there is a change in proportion of interest component and principal repaid. With every EMI payment, the proportion of principal repayment in EMI keeps increasing and the interest component keeps reducing.

Personal Loan EMI for Rs. 1 Lakh loan amount at lowest 13.99% interest rate offered by HDB Financialfor different tenures

	2 years	3 years	5 years
HDB Financial EMI for a loan amount Rs. 1 lakh at 13.99%	4,801	3,417	2,326
Total amount you pay back to the bank including principal and interest	1.15 Lakh	1.23 Lakh	1.40 Lakh
Interest you have to pay over loan tenure	15,224	23,012	39,560

The above table shows that EMI paid on the loan will be lower for a loan taken for a longer tenure. However, your total interest outgo is significantly higher in a long tenure loan. In the above example, if you take a Rs. 1 Lakh loan from HDB Financial for a period of 4 years, you pay the lowest EMI of Rs. 2,326. However, you pay an interest of Rs. 39,560 on a Rs. 1 Lakh loan.
In contrast, if you take a Rs. 1 Lakh loan from HDB Financial at the lowest loan rate for a period of 2 years, you pay a higher EMI of Rs. 4,801 and pay an interest of only Rs. 15,224 which is less than half of what you pay for a 4 year loan. Hence, it is advisable to choose your loan tenure wisely as longer tenure means high interest expenses.

Factors affecting HDB Financial Personal Loan EMI

• Loan amount – This is the amount borrowed by a borrower from HDB Financial.If you apply for a higher loan amount, your monthly EMI will be high. HDB Financial gives a minimum loan of Rs. 1 Lakh which can go upto an amount of Rs. 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 loan for a maximum tenure of 5 years.

HDB Financial Personal Loan calculator formula

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

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

In above formula,

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

• 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 personal loan is an unsecured loan which 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 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 do an evaluation of 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 personal loan eligibility is a function 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 a 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 0.45. 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 own 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.
  • Borrowers within the age group of 21 and 60 years.
  • Loan amount of minimum Rs. 1 Lakh to Rs. 20 Lakh.
  • Loan Tenure 1 to 5 years.
  • Interest rates in the range of 13.99% to 16.99%.
  • Lowest EMI of Rs. 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 special category of borrowers including borrowers working in reputed companies, banks or government employees etc.

Personal loan EMI calculator HDB Financial – How it works?

• HDB Financial personal loan calculator calculates EMI considering 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 personal loan reduces. HDB Financial gives you two options:

• Reduce your loan tenure and keep EMI on your personal loan unchanged: This option allows you to close your loan earlier and save the interest outgo associated with the remaining tenure. This is suitable for borrowers who feel that they have adequate income to continue servicing the same level of EMIs.
• Reduce the amount of EMI and keep your loan tenure same: This option allows you to reduce your monthly EMI and hence, increases the availability of monthly surplus which you can deploy for other purposes. This is suitable for borrowers who anticipate higher monthly personal expenses and hence, would want to reduce their monthly EMI obligations.

FAQs on HDB EMI Calculator

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