HDFC Limited, a leading mortgage firm, can be an ideal friend in your dream home search. The housing finance firm enjoys a great deal of customer loyalty by virtue of a plethora of home loan and related services. Not only HDFC has a loan to buy a new or resale home, it also runs a special finance scheme for home construction.
The falling interest rates have only made its home loan more attractive. Currently, the rates range from 8.35%-9.05%, based on the amount of loan sanctioned. Whenever the discussion happens on an interest rate, it often leads many to ponder over the expected EMI, which stands for Equated Monthly Installment. After all, this is what you need to pay each month for about 20-30 years, the tenure generally opted by a borrower.
So, the consideration for the same is valid in every sense of the word. Now, the question appears, how will you know the monthly installment applicable on a home loan? The answer comes with the dynamics of HDFC Home Loan EMI Calculator. So, why to delay in understanding the dynamics of the calculator? Let me pen down the calculator in a simple manner so that you can comprehend and implement in real-time.
Work Methodology of HDFC Home Loan EMI Calculator
The calculator is a simple mathematical device that computes the installment payable on a loan. The installment is nothing but a combination of interest and principal portions of a loan. You just need three ‘Musketeers’ - Loan Amount, Interest Rate and Tenure - to get the EMI estimate pop up on your screen. And if you believe the calculator only computes the EMI, you can be proven pleasantly wrong. It is because the calculator goes on to find out the overall interest outgo from one’s pocket over the loan tenure.
On using the calculator, you can find the per lakh EMI of HDFC Home Loan to be ₹758-808. Now, if you avail a 20-year home loan of ₹45 lakhs, the interest rate applicable will be 8.50%-8.90% per annum. The EMI will be ₹39,052-40,199, while the interest outgo is expected to touch ₹48,72,491-51,47,690 over the course of a loan.
Since a home loan runs for as long as 30 years, it is advisable to choose a relatively shorter tenure to curtail the amount of interest outflow. This can be explained better with the help of an example.
Example - Sachin Deshmukh and Rohit Mandal have applied for a home loan of ₹40 lakhs each at HDFC. While Sachin opted a 20-year tenure, Rohit went with a 25-year loan. Assume the interest rate in both the cases is 8.60% per annum. Now see, who will save more?
Sachin’s EMI and interest repayments are going to be ₹34,967 and 43,41,962 over the course of 20 years. On the other hand, Rohit may pay a lower EMI of ₹32,479 but a heavier interest payout of ₹57,43,726 would empty his pocket fast. Sachin would thus reduce the interest outgo by as much as ₹14,01,764 (₹57,43,726-43,41,962) in comparison to Rohit.
By-Product of HDFC Home Loan EMI Calculator
The EMI calculator also flashes the work of an amortization calculator. Yes, it’s true. Just adjacent to the results of the EMI calculator, you will see the year-on-year repayment of principal and interest, which is the function of an amortization calculator. It’s also something you should glance at because it can help you figure out the expected outflow from your pocket, both in terms of interest and principal.
So, you must have gained a lot from HDFC Home Loan EMI Calculator. This, I hope, will help plan a smooth home loan journey with the mortgage firm. Just search the best property on view and apply for a home loan at HDFC, which would then take care of the road ahead.
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