HDFC home loan alert: Housing Development Finance Corporation Limited (HDFC) revised its Retail Prime Lending Rate (RPLR) on home loans on Monday, just days after the Reserve Bank of India (RBI) raised its repo rate for the fifth time in seven months. HDFC announced a 35 basis point increase in its RPLR on housing loans, which serves as the benchmark for its Adjustable Rate Home Loans (ARHL).
Raised repo rate
The RBI raised the repo rate by 0.35 percent earlier this month, from 5.9 percent to 6.25 percent.
As per the statement, HDFC Ltd. provides cheap home loan interest rates starting at 8.20% annually (for individuals with a credit score above 800). The interest rate for people who don’t have the necessary credit score might range from 8.40% to 8.90%.
This interest rate is applicable on home loans, balance transfers, home improvements, and home extensions, according to the statement. In addition to adjustable-rate loans, commonly referred to as floating rate loans, HDFC also offers TruFixed loans, in which the interest rate on the mortgage is set for the first two years of the loan’s term before switching to an adjustable rate.
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HDFC home loan alert: Formula for EMI Calculation:
P x R x (1+R)^N / [(1+R)^N-1] where-
P = Principal loan amount
N = Loan tenure in months
R = Monthly interest rate
The rate of interest (R) on your loan is calculated per month.
R = Annual Rate of interest/12/100
If rate of interest is 7.2% p.a. then r = 7.2/12/100 = 0.006
For example, If a person avails a loan of ₹10,00,000 at an annual interest rate of 7.2% for a tenure of 120 months (10 years), then his EMI will be calculated as under:
EMI= ₹10,00,000 * 0.006 * (1 + 0.006)120 / ((1 + 0.006)120 – 1) = ₹11,714.
The total amount payable will be ₹11,714 * 120 = ₹14,05,703. Principal loan amount is ₹10,00,000 and the Interest amount will be ₹4,05,703.
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