Buying a home is one big decision that people take after carefully evaluating the pros and cons of the move. One thing that makes everyone conscious is the rate of interest chargeable to the loan. After all, it determines the pace of repayment to a greater degree.
Many offers seem exciting at first glance with massive loan eligibility. But, when the eyes pop on the rate, many faces sway away from the offers and search for the affordable one.
Amidst the intense search going on, HDFC Home Loan comes out as an option with reasonable interest rates, making one wonder whether it is the one they are looking for. Let’s check through the article as to how the rates stack now.
HDFC Home Loan Interest Rate 2018
On a whole, HDFC charges an interest rate of 8.70%-9.35% per annum. The loan, which is secured by a registered or equitable mortgage of the property sought, can be availed at this rate by both salaried and self-employed segments. The rates vary as per the loan amount financed. The rate goes up as the loan amount applied goes up. It’s because of the fact the credit exposure to risk becomes greater with a higher quantum of finance.
Also, the credit score one has, determines the rate to a great extent. HDFC, unlike other lenders charging on the basis of Marginal Cost of Lending Rate (MCLR), prices its loan based on its Retail Prime Lending Rate (RPLR), which at the moment stands at 16.65%. The RPLR is further deducted by a certain percentage to arrive at the actual rates. So, more the RPLR gets deducted by, lower the eventual lending rate would be and vice-versa.
The rate of deduction is expected to be more in the case of those with a good credit score and sound credit history as opposed to someone found wanting in these.
Home Loan Calculator HDFC
After a brief on the interest rates, let’s shift our focus on the Home Loan Calculator HDFC that actually shows the results of the former. The calculator helps to compute the loan eligibility, EMI and an amortization schedule.
It’s the income, savings and credit score that decide the amount of loan you are eligible to receive. Greater the income and savings you have more would be the loan eligibility and vice-versa. The calculator considers these aspects thoroughly before arriving at a conclusion.
On the other hand, the EMI is calculated using the loan amount, tenure and rate of interest. Apart from the EMI, which extends to as Equated Monthly Installment, you can also get to see the total interest outgo for the period you choose to go for a loan. So often the home loan interest doubles to that of the amount actually owned, over a period of 20-30 years for which the loan is normally taken by the borrowers.
Therefore, the need for a tool that can let you know the repayment periodically gains so much prominence. And what better than the amortization calculator to look at for the same. The calculator shows the schedule of repayment in the form of both principal and interest repayments. This will only help you draw out a strategy to prepay the loan from the savings or reserves, which can be planned from now.