HDFC Personal Loan EMI Calculator - Aug 2020

• Loan amount – This is the amount that you have borrowed from HDFC Bank. If you apply for a higher loan amount, your monthly EMI will be high. HDFC Bank gives a minimum loan of ₹ 50,000 , which can go upto an amount of ₹ 75 Lakh.
• Interest rate - Higher interest rate increases your loan EMI as well as the total cost of the loan. HDFC Bank 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 HDFC Bank is 10.75%. 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 HDFC Bank. Longer loan tenure means lower personal loan EMI. Generally, HDFC Bank 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 Lakh for 2 years at an interest rate of 10.50%. EMI calculated for this loan amount is ₹ 9,275 and the total annual EMIs to be paid annually is ₹ 1,11,302. The EMI schedule of loan for 2 years is explained below in the table –

Amortization Schedule for a Personal Loan of ₹ 2 Lakh over the 2 years

Year	Interest paid during the year	Principal repaid during the year	Total amount paid during the year (Interest + Principal)	Outstanding Principal
2020	₹ 8,086	₹ 38,290	₹ 46,376	₹ 1,61,710
Aug	₹ 1,750	₹ 7,525	₹ 9,275	₹ 1,92,475
Sep	₹ 1,684	₹ 7,591	₹ 9,275	₹ 1,84,884
Oct	₹ 1,618	₹ 7,657	₹ 9,275	₹ 1,77,226
Nov	₹ 1,551	₹ 7,724	₹ 9,275	₹ 1,69,502
Dec	₹ 1,483	₹ 7,792	₹ 9,275	₹ 1,61,710
2021	₹ 12,305	₹ 98,997	₹ 1,11,302	₹ 62,712
Jan	₹ 1,415	₹ 7,860	₹ 9,275	₹ 1,53,849
Feb	₹ 1,346	₹ 7,929	₹ 9,275	₹ 1,45,920
Mar	₹ 1,277	₹ 7,998	₹ 9,275	₹ 1,37,922
Apr	₹ 1,207	₹ 8,068	₹ 9,275	₹ 1,29,854
May	₹ 1,136	₹ 8,139	₹ 9,275	₹ 1,21,715
Jun	₹ 1,065	₹ 8,210	₹ 9,275	₹ 1,13,504
Jul	₹ 993	₹ 8,282	₹ 9,275	₹ 1,05,222
Aug	₹ 921	₹ 8,355	₹ 9,275	₹ 96,868
Sep	₹ 848	₹ 8,428	₹ 9,275	₹ 88,440
Oct	₹ 774	₹ 8,501	₹ 9,275	₹ 79,939
Nov	₹ 699	₹ 8,576	₹ 9,275	₹ 71,363
Dec	₹ 624	₹ 8,651	₹ 9,275	₹ 62,712
2022	₹ 2,214	₹ 62,712	₹ 64,926	₹ 0
Jan	₹ 549	₹ 8,726	₹ 9,275	₹ 53,986
Feb	₹ 472	₹ 8,803	₹ 9,275	₹ 45,183
Mar	₹ 395	₹ 8,880	₹ 9,275	₹ 36,303
Apr	₹ 318	₹ 8,958	₹ 9,275	₹ 27,346
May	₹ 239	₹ 9,036	₹ 9,275	₹ 18,310
Jun	₹ 160	₹ 9,115	₹ 9,275	₹ 9,195
Jul	₹ 80	₹ 9,195	₹ 9,275	₹ 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 Lakh, taken at the lowest interest rate of 10.50%, EMI paid is ₹ 9,275 and an annual total of EMIs is ₹ 1,11,302, the interest component is ₹ 16,525 while the principal component is ₹ 94,778 in year 1 of loan disbursement. You repay only 47.39% of the total principal after paying 12 EMIs during the first year.

In year 2, the interest component of EMI is around 5.46%, while the principal component is around 94.54%. Upto 2 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 HDFC Bank Personal Loan EMI is calculated:

In the above formula,

P = Loan amount. This can range from ₹ 50,000 to ₹ 75 Lakh

r = Rate of interest per month. Current rate is 10.75%

n = tenure in month. For HDFC Bank, 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 HDFC Bank 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 - HDFC Bank 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 - HDFC Bank 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. HDFC Bank lends up to a maximum FOIR of 0.70. Based on the FOIR, the bank will also estimate the maximum amount of EMI you can service as a borrower. HDFC Bank'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.
  • HDFC Bank 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: HDFC Bank 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 21 and 60 years.
  • Loan amount of minimum ₹ 50,000 to ₹ 75 Lakh.
  • Loan Tenure 1 to 5 years.
  • Interest rates in the range of 10.75% to 22.00%.
  • Lowest EMI of ₹ 2,162 per lakh.
• Processing Fees: Upto 2.50% Min Rs. 1,999 of loan amount. This is to be paid at the time of loan application
• Special schemes: HDFC Bank 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.

• HDFC Bank personal loan calculator are online tools which give out EMI calculations using a combination of loan amount, interest rate and loan tenure.
• HDFC Bank 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, HDFC Bank 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 HDFC Bank, the interest rate and the remaining tenure in the EMI calculator.

HDFC Bank has announced that the three months loan moratorium is available for the term loans and interest of working capital loans for March to May 2020. As a borrower, you have the option to opt-in or opt-out of the moratorium by informing HDFC Bank. The interest will continue to accrue on the principal outstanding during this moratorium and the accumulated interest would be added to the principal amount resulting in the extension of loan tenure except in cases where the tenure extension is not possible will increase EMI amount. The moratorium on payment of Personal Loan EMI’s will not be treated as default and will not have any negative impact on the borrower’s credit score. To know more about the moratorium option, you may contact HDFC Bank customer care or its nearest branch.

✅Why should I calculate HDFC 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 HDFC Bank 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 HDFC Bank on personal loan?

HDFC Bank offers personal loan at 10.75% interest rate for a maximum of 60 months, and hence lowest EMI on per lakh loan amount is ₹ 2,162. However, HDFC Bank may offer a lower interest rate and EMI for their salary account holders or existing bank customers can vary.

✅How can I pre close HDFC Bank personal loan?

You can preclose your HDFC Bank 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 HDFC Bank ?

HDFC Bank offers you an option of prepayment after 12 months at 2 - 4%.

✅Is there any processing charge on personal loan from HDFC Bank?

Yes, HDFC Bank charges a certain amount of processing fee to process your loan application. Currently, HDFC Bank charges a processing fee of Upto 2.50% Min Rs. 1,999 on Personal Loan.

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

No, for taking a loan from HDFC Bank, 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 HDFC Bank ?

Yes, you can opt for a co-applicant to take a personal loan from HDFC Bank 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 HDFC Bank 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 HDFC Bank 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.