Hdfc home loan prepayment rules

Rate of return is lower In case you are planning to prepay your loan, you first need to calculate the opportunity cost that is the benefit forgone for not investing the same sum that you are planning to prepay. In case the opportunity cost is lower than the money saved through interest, it would make sense to make part prepayment of home loan. In case you have taken a home loan of ₹50 lakh with a tenure of 20 years at an interest rate of 7.5%, and if you make partial prepayment of ₹5 lakh at the end of the fifth year, then you will save an interest of ₹8.8 lakh over the tenure of loan. At the same time, if you invest it in a fixed deposit, which is currently giving an interest rate of around 5.4%, you will earn ₹6 lakh at the end of 15 years. So, if one calculates the post-tax return on FDs, the gains would go down further. Given the fact that the rate of interest on FDs and other small saving instruments is at a multi-decade low, planners are advising people to make prepayment on home loans. “The home loan interest rates have come down to below 8% and there is hardly any debt instrument that can deliver a return of around 8% post-tax. If one invests in equity there is a probability of earning higher return, but then it carries risk as well, as there is no guarantee of earning such return," said Melvin Joseph, a Sebi-registered investment adviser and founder of Finvin Financial Planners. Experts say while comparing the rate of return from the investment with the rate of in...

A home loan, which is usually taken for as long as 20-30 years, can have massive interest obligations for a borrower to fulfill. But the obligation can be reduced to an extent if you use the prepayment facility that banks and housing finance companies (HFCs) offer to borrowers. Lenders provide the prepayment facility to the borrowers with which they can make part or full payment of their loan amount before the fixed tenure chosen by them. This helps borrowers in reducing both the interest and principal outstanding amount over the tenure. In this article, we will be telling you everything related to the Prepayment of Home Loan — what is a prepayment facility, how much money you can save by this, and about the prepayment facilities of the top home loan lenders. Keep reading to know more! Let’s Know about Prepayment Facility in Detail! As we told you how So when an individual decides to save the interest amount over the loan tenure and reduce the overall loan burden, the facility that an individual opts is known as Prepayment Facility. With this, a person can pay an additional amount of principal over and above your regular EMI amount at different points in your tenure. When this is done in small parts, it is known as Part-prepayment Facility. So, when an individual pays some additional amount anytime during the course of the loan, the principal outstanding amount will automatically decrease, and by virtue of that, your EMI or loan tenure can also be reduced. While opting for...

Table of Contents • • • • • • • • HDFC home loan prepayment online: Things you should know Before proceeding with HDFC home loan prepayment online, you should know the following: • If you are exploring HDFC home loan prepayment at an early stage of your home loan, then, the savings on interest rate will be more. • You will have money for all your immediate and short-term needs. • If you do not have any loan higher than your HDFC home loan, prepaying it makes sense. • There is no prepayment charge for home loans with floating rate of interest. There are prepayment charges levied on home loans with fixed rate of interest in case of refinancing. Also read all about the drawbacks and HDFC home loan prepayment: Various ways Increase your HDFC home loan EMI amount Increasing your EMI amount also results in HDFC home loan prepayment. This can be done by asking HDFC to change the EMI amount. Once done, you can make the HDFC home loan prepayment online by auto-debit or net banking. If you are in a job that shows steady growth and increase in monthly income, increasing the EMI is easily doable, where the extra money can be used to pay off the HDFC home loan. Do part-payment of HDFC home loan By making a part-payment of your HDFC home loan over and above your EMI, you save interest on the loan as the principal amount gets reduced. Part payment can be made, whenever you have funds available or even at regular intervals if you plan it. By doing a HDFC home loan part prepayment online y...

Buying a house is not only ones biggest dream in our lifetime but is also undoubtedly the significant financial task of our lifetimes. One of the most innovative ways to save money is to prepay your home loan early. You may prepay the entire outstanding home loan amount or prepay partially to save on home loan interest payments. Prepaying a home loan is the best thing that a borrower can do. Although there are contrasting views on this as well. Gaurav Kapoor, Director & Co-Founder, Fincorpit Consulting explains that the interest will only be calculated on the amount remaining after your prepayment is applied to your outstanding principal. As a result, you will significantly reduce the interest component and the principal will be repaid faster for the remaining term of the loan. “In contrast, if you take out a floating rate loan, you cannot be charged for He added that as a result of your prepayment, you finish up your loan much before, you thought at the start. Hence, prepayments would be an effective thing the customers might not know or might not think for choosing these. Regularized micro prepayments get auto-debited from your bank account, hence this is the best option. Should you prepay your home loan? You may consider prepaying your home loan, depending on your financial condition. For instance, you could prepay your home loan if you get a windfall or a bonus. Moreover, banks and NBFCs do not charge you a prepayment penalty on the prepayment of floating rate “If you ...

Life has its ups and downs and sometimes you might face a situation where you need a little extra money. A loan comes in handy at such times. But it may occasionally happen that your financial situation turns around faster than anticipated and allows you to pay off a sizeable chunk of the loan and clear as much debt as possible. Paying off your debt faster will help reduce the total interest charges, and this in turn means you spend less time in debt. So far so good. But before you walk into the bank flashing a wad of cash, familiarise yourself with some facts. It’s understandable why there’s a penalty for delayed payment, but did you know that one can be penalised for early repayment as well? What is prepayment penalty? As the name suggests, a prepayment penalty is a monetary burden you have to bear when you pay your loan off earlier than specified in the agreement. If the terms and conditions of your loan agreement contain a prepayment clause, you will be penalised if you clear your debt early. If you feel this sounds counterintuitive and are wondering why no one would want all their money at one go, think of it this way – when you repay a loan early, the lender will not get the expected interest (for lenders, the interest is their profit). Hence this clause is often put in place. The amount can vary and the practice isn’t universal. It would depend on the lender’s terms and conditions. To find out, you should read the fine print before you sign on the dotted...

HDFC Top Up Loans Sometimes dreams need a little extra help. With HDFC's Top Up Loans you can celebrate your personal or professional milestones such as marriage, a dream vacation, business expansion, debt consolidation etc. with super ease and minimal new documentation. Let your dream fuel more dreams. *The above ROI/EMI is applicable for loans under the Adjustable Rate Home Loan Scheme of Housing Development Finance Corporation Limited (HDFC) and is subject to change at the time of disbursement. The rates above are variable in nature and linked to HDFC's RPLR and shall fluctuate according to the movement in the same. All loans at the sole discretion of HDFC Ltd. To read terms & Conditions, Maximum Funding** The maximum Top Up Loan that you can avail of is equivalent to your originally sanctioned loan amount of all the Home Loans put together or ₹50 lacs, whichever is lower. This is further subject to the cumulative outstanding loans plus the Top Up being offered not exceeding an overall cap of 80% for cumulative exposure up to ₹75 lacs & 75% if the cumulative exposure is over ₹75 lacs of the Market Value of the mortgaged property, as assessed by HDFC. **You can apply for a Top Up Loan after 12 months' of the final disbursement of your existing Home Loan and upon possession / completion of the existing financed property or basis the last 12 months' track record of the Top Up Loan being refinanced from another institution, subject to possession / completion of the property...