Prepaying your HDFC home loan can help you save significantly on interest and reduce your repayment tenure. With the HDFC home loan prepayment calculator, you can instantly calculate how prepayments impact your loan and make informed financial decisions.
In this guide, we’ll cover how the HDFC prepayment calculator works, the steps to use it, and how prepayments benefit you. With actionable insights and expert-backed guidance from Credit Dharma, you’ll learn to optimize your home loan repayments effectively.
Save Lakhs on Your HDFC Home Loan with Prepayments!
Why Prepay Your HDFC Home Loan?
Prepayment is a financial strategy where you repay a portion of your home loan ahead of schedule. This simple step comes with a host of benefits:
| Benefit | Description |
|---|---|
| Lower Interest Costs | By reducing your outstanding principal, prepayment directly slashes the total interest payable on your loan. |
| Shorter Tenure | Prepayments help cut down your loan tenure, allowing you to become debt-free faster. |
| Reduced EMIs | If you prefer, you can opt for lower EMIs while keeping the loan tenure constant. |
| Significant Savings | Depending on your loan amount and tenure, prepayment can save you lakhs of rupees over the loan’s lifetime. |
Imagine owning your home outright years ahead of schedule—that’s the power of prepayment!
HDFC Home Loan Prepayment Charges
| Loan Type | Time Period | Prepayment Charges |
|---|---|---|
| Adjustable Rate Loans (ARHL) Combination Rate Home Loan (CRHL) (Variable Rate Period) | First 6 months | 2% (plus applicable taxes) on the prepaid amount. |
| 6 to 36 months | Up to 25% of opening principal per financial year: No charges. Beyond 25%: 2% on excess amount. | |
| After 36 months | Own sources: No charges. Refinanced funds: 2%. | |
| Fixed Rate Loans (FRHL) Combination Rate Home Loan (CRHL) (Fixed Rate Period) | First 6 months | 2% (plus applicable taxes) on the prepaid amount. |
| 6 to 36 months | Up to 25% of opening principal per financial year: No charges. Beyond 25%: 2% on excess amount. | |
| After 36 months | Own sources: No charges. Refinanced funds: 2%. |
Factors to Consider Before Prepaying a Home Loan
While prepaying home loans seems lucrative, borrowers must evaluate certain aspects beforehand:
Things to Know Before Prepaying Your HDFC Home Loan
Before using the HDFC home loan prepayment calculator, keep these points in mind:
| Factor | Description |
|---|---|
| Prepayment Charges | 1. Check if your loan agreement includes prepayment penalties. 2. Many loans have no charges for prepaying. |
| Liquidity Matters | 1. Ensure prepayment doesn’t leave you short of emergency funds. 2. Maintain a healthy balance between savings and prepayments. |
| Frequency of Prepayments | Decide whether to make one-time prepayments or regular lump sums based on your cash flow. |
Pro Tip: If your credit score is low, consider working on it for 3-6 months before applying for a home loan.
How Credit Dharma’s Home Loan Prepayment Calculator Works
The HDFC Home Loan Prepayment Calculator is a simple yet powerful tool designed to help you understand how prepayments impact your loan. With just a few inputs, it gives you clear insights into interest savings and tenure reduction.
Here’s a step-by-step guide to use Credit Dharma’s HDFC Home Loan Prepayment Calculator
- Enter Loan Details
Input your loan amount, interest rate, and tenure.
- Add EMI Data
Specify the number of EMIs you’ve already paid.
- Input Prepayment Amount
Enter the amount you’re planning to prepay.
- Calculate
Hit the button to see your results instantly.
Example Scenario:
- Loan Amount: ₹1 crore
- Interest Rate: 9% p.a.
- Tenure: 20 years
- EMIs Paid: 12
- Prepayment Amount: ₹2 lakh
Calculator Output:
- Total Interest Saved: ₹8,47,731
- Tenure Reduction: 12 months
This simple prepayment saves lakhs and shaves a year off the loan tenure!
Conclusion
Prepaying your home loan is one of the smartest ways to save on interest and achieve financial freedom sooner. HDFC Bank’s flexible prepayment options and Credit Dharma’s expert tools make it easy to strategize and execute your plan.
Ready to take control of your home loan?
Talk to a Credit Dharma expert today and discover how much you can save. Let’s slash your home loan tenure together!
Frequently Asked Questions
Prepayment can lead to a reduction in the loan tenure and/or EMIs, depending on the option the borrower chooses. By reducing the principal amount, the interest component decreases, allowing for these adjustments.
Prepaying a home loan can reduce liquidity, incur opportunity costs from foregone investment returns, lead to prepayment penalties, potentially affect your credit score, decrease tax benefits, and reduce financial leverage, so it’s crucial to weigh these risks against the benefits.
Yes, you can make prepayments on your home loan every month, provided your lender allows frequent prepayments without penalties.
Deciding between prepayment or continuing with a home loan depends on your financial situation. Prepayment can save on interest costs but may deplete your cash reserves. Consider your financial goals and consult with a financial advisor to make an informed decision.
For floating rate home loans, most banks, including HDFC, do not charge a prepayment penalty. However, fixed-rate loans may incur charges, especially if the prepayment is significant.
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