HDFC Home Loan Part Prepayment

EMI Calculation Formula:

\[ PMT = P \times \frac{r \times (1 + r)^n}{(1 + r)^n - 1} \]

Principal Amount (P):

INR

Annual Interest Rate:

% p.a.

Loan Term:

years

Prepayment Amount:

INR

Prepayment After Month:

months

Initial EMI:

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1. What is HDFC Home Loan Part Prepayment?

HDFC Home Loan Part Prepayment allows borrowers to pay a portion of their loan principal ahead of schedule. This calculator helps estimate how prepayments affect your EMI and total interest, with HDFC's current rates starting at 7.90% p.a.

2. How Does the Calculator Work?

The calculator uses the standard EMI formula with prepayment adjustments:

\[ PMT = P \times \frac{r \times (1 + r)^n}{(1 + r)^n - 1} \]

Where:

\( P \) — Principal loan amount (INR)
\( r \) — Monthly interest rate (annual rate ÷ 12 ÷ 100)
\( n \) — Loan term in months
\( PMT \) — Monthly EMI payment (INR)

Prepayment Adjustment: The calculator first computes the remaining principal at the prepayment month, subtracts the prepayment amount, then recalculates EMI for the remaining term.

3. Importance of Prepayment Calculation

Details: Prepayments can significantly reduce total interest paid and either shorten your loan term or lower your EMIs. This calculator helps visualize these benefits for HDFC home loans.

4. Using the Calculator

Tips: Enter loan amount in INR, HDFC's current interest rate (default 7.90%), loan term in years, and optional prepayment details. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Does HDFC charge for part prepayments?
A: HDFC typically allows free part prepayments on floating rate loans, but check current terms as policies may change.

Q2: How often can I make prepayments?
A: HDFC usually allows multiple prepayments per year, but there may be minimum amount requirements.

Q3: Should I reduce EMI or loan tenure after prepayment?
A: Reducing tenure saves more interest, while reducing EMI improves cash flow. Choose based on your financial goals.

Q4: Are prepayments tax deductible?
A: Only EMIs qualify for tax benefits under Section 80C. Prepayments don't offer additional tax benefits.

Q5: What's better - higher EMI or prepayments?
A: Prepayments offer more flexibility as you can choose when and how much to pay, while higher EMIs commit you to larger monthly payments.