HDFC Personal Loan EMI Calculator - Jan 2019

Personal Loan EMI Calculator HDFC

HDFC Bank Personal Loan EMI

• Personal Loan EMI (or equated monthly instalment) is a fixed amount of money paid by you to HDFC Bank 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.
• HDFC Bank offers affordable and convenient personal loans with loan EMIs as low as Rs. 2,187 per lakh for a 60 tenure and lowest rate of interest on personal loans at 11.25%.

Personal loan EMI calculator at different tenures

Personal Loan EMI for different loan amounts and tenures @ 11.25% interest rate

Loan Amount (Rs.)	2 Years	3 Years	5 Years
1 Lakh	Rs. 4,672	Rs. 3,286	Rs. 2,187
3 Lakh	Rs. 14,017	Rs. 9,857	Rs. 6,560
5 Lakh	Rs. 23,362	Rs. 16,429	Rs. 10,934
10 Lakh	Rs. 46,724	Rs. 32,857	Rs. 21,867

• 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 11.25% interest rate offered by HDFC Bankfor different tenures

	2 years	3 years	5 years
HDFC Bank EMI for a loan amount Rs. 1 lakh at 11.25%	4,672	3,286	2,187
Total amount you pay back to the bank including principal and interest	1.12 Lakh	1.18 Lakh	1.31 Lakh
Interest you have to pay over loan tenure	12,128	18,296	31,220

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 HDFC Bank for a period of 4 years, you pay the lowest EMI of Rs. 2,187. However, you pay an interest of Rs. 31,220 on a Rs. 1 Lakh loan.
In contrast, if you take a Rs. 1 Lakh loan from HDFC Bank at the lowest loan rate for a period of 2 years, you pay a higher EMI of Rs. 4,672 and pay an interest of only Rs. 12,128 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 HDFC Bank Personal Loan EMI

• Loan amount – This is the amount borrowed by a borrower from HDFC Bank.If you apply for a higher loan amount, your monthly EMI will be high. HDFC Bank gives a minimum loan of Rs. 50,000 which can go upto an amount of Rs. 50 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 11.25%. 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 loan for a maximum tenure of 5 years.

HDFC Bank Personal Loan calculator formula

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

Here is an illustration of how HDFC Bank Personal Loan EMI is calculated:

In above formula,

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

r = Rate of interest per month. Current rate is 11.25%

n = tenure in month. For HDFC Bank, 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 HDFC Bank 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 - HDFC Bank 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 - 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 0.45. 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 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.
  • 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.
  • Borrowers within the age group of 21 and 60 years.
  • Loan amount of minimum Rs. 50,000 to Rs. 50 Lakh.
  • Loan Tenure 1 to 5 years.
  • Interest rates in the range of 11.25% to 20.00%.
  • Lowest EMI of Rs. 2,187 per lakh.
• Processing Fees: Min 0.99%, Max 2.50% Up to Rs. 10,000 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 special category of borrowers including borrowers working in reputed companies, banks or government employees etc.

Personal loan EMI calculator HDFC Bank – How it works?

• HDFC Bank personal loan calculator calculates EMI considering 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 personal loan reduces. HDFC Bank 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 HDFC EMI Calculator

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