Understanding the nuances of home loan balance transfers is crucial, and the Credit Dharma HDFC Home Loan Balance Transfer Calculator simplifies this process. This comprehensive guide explores this essential tool, enabling you to adeptly manage your home loan commitments.
What is a Home Loan Balance Transfer?
A Home Loan Balance Transfer is a strategy where borrowers can transfer their outstanding loan to a different lender, such as HDFC, to benefit from lower interest rates. This option is particularly advantageous for those who secured their initial loans at higher rates but are now eligible for reduced rates due to improved credit scores.
HDFC Home Loan Balance Transfer Calculator: A Closer Look
The HDFC Home Loan Balance Transfer Calculator is an intuitive digital tool that offers insights into the savings you could achieve. By entering details like your current loan balance, existing interest rate, and HDFC’s proposed rate, you can quickly evaluate the financial benefits of transferring your loan.
How to Use the HDFC Calculator
- Current Loan Details: Enter your existing loan amount, interest rate, and remaining tenure.
- New Loan Terms with HDFC: Input HDFC’s interest rate and your desired loan tenure.
- Output Analysis: The calculator will display the new EMI, total interest paid, and potential savings.
Credit Dharma HDFC Home Loan Balance Transfer Calculator Formula
The Calculator takes input as shown below to calculate the Balance Transfer benefits.
| Outstanding Principal | P |
| Yearly ROI | ROI |
| Tenure | T |
| New Tenure | NT |
| NewROI | NROI |
Outputs that we will get from the calculator will be
| Total Savings | S |
| Existing EMI | E |
| New EMI | NE |
| Monthly EMI Savings | ES ( E – NE ‘) |
| NewROI | NROI |
For example, assume that a person took a home loan of which Rs. 65 Lakhs Outstanding Principal is yet to be paid for a tenure of 13 years at an agreed-upon interest rate of 10.5%. and now wants to transfer the home loan to HDFC with new interest rate of 9.45% and without changing the tenure of 13 years So, according to the formula –
- P = 65,00,000
- ROI = 10.5%
- T = 13 Years
- NT = 13
- NROI = 9.45
Now using the Balance Transfer Formula:
R = ROI/100
E = [P x R x (1+R) ^T] / [((1+R) ^T)-1]
Current Amount = A = E*T*12
NR = NROI/100
NE = [P x R x (1+R) ^NT] / [((1+R) ^NT)-1]
New Amount = NA = NE*NT*12
ES = A – NA
A home loan balance transfer calculator will swiftly provide you with precise calculations, specifically in this scenario.
Existing EMI: Rs.76,538
New EMI: Rs.72,518
Monthly Savings: Rs.4,019
Total Savings: Rs.6,27,020
Tired of banks increasing your home loan rates without your knowledge?
Advantages of the HDFC Calculator
- User-Friendly: Easy input for quick results.
- Accessibility: Free and open to all without registration.
- Flexibility: No limit on usage, allowing for various scenario assessments.
- Relevance: An essential tool in the dynamic home loan market.
Benefits of HDFC Home Loan Balance Transfer
- Lower Interest Rates: A significant reduction in interest rates, decreasing the total interest cost.
- Top-up Loan Facility: Availability of additional top-up loans for further financial needs.
- No Prepayment Charges: Generally, no fees for prepayment or foreclosure for floating rate loans.
Conclusion
The HDFC Home Loan Balance Transfer Calculator is a vital instrument for anyone looking to minimize their home loan expenses. It provides a transparent view of potential savings and assists in making informed decisions about transferring your home loan to HDFC.
Also check home loans offers from top banks
| Lender | Home Loan Interest Rates (Above 75 lakhs) | Home Loan Interest Rates (Above 30 lakhs to 75 lakhs) | Home Loan Interest Rates (Up to 30 lakhs) |
|---|---|---|---|
| LIC Housing Finance | 8.50% – 10.75% | 8.50% – 10.55% | 8.50% – 10.35% |
| State Bank of India | 8.50% – 10.05% | 8.50% – 10.05% | 8.50% – 10.15% |
| HDFC Bank Limited | 8.40% onwards | 8.40% onwards | 8.40% onwards |
Frequently Asked Questions [FAQs]
Transferring your home loan balance typically takes between 5 to 20 days. This duration can vary based on the processing speed of your current bank and the time needed for documentation and approval processes at the new bank.
Initiating a balance transfer for your home loan does not directly impact your credit score. In fact, it may have positive effects, such as reducing the number of active loan accounts and decreasing your overall credit utilisation.
Consider transferring your home loan balance if you find yourself subject to an interest rate that exceeds the current market average. Some Banks are known for offering attractive rates for these kinds of balance transfers.
Absolutely. Under the Income Tax Act of 1961, you qualify for tax deductions on both the principal and interest amounts of your balance transfer loan. Since these tax advantages can change from year to year, it’s advisable to consult with banks for up-to-date information on the tax benefits available for your loan.
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