HDFC Bank Loan Calculator Home Loan With Prepayment

HDFC Loan Prepayment EMI Formula:

\[ EMI_{new} = \frac{(P - E) \times R \times (1+R)^{(N - M)}}{(1+R)^{(N - M)} - 1} \]

Original Principal (P):

INR

Prepayment Amount (E):

INR

Annual Interest Rate:

Original Loan Tenure (N):

months

Months Paid (M):

months

New EMI After Prepayment:

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1. What is the HDFC Loan Prepayment EMI Formula?

The HDFC Loan Prepayment EMI formula calculates your new EMI after making a partial prepayment on your home loan. It helps you understand how prepayments can reduce your monthly burden or loan tenure.

2. How Does the Calculator Work?

The calculator uses the HDFC prepayment EMI formula:

\[ EMI_{new} = \frac{(P - E) \times R \times (1+R)^{(N - M)}}{(1+R)^{(N - M)} - 1} \]

Where:

\( P \) — Original principal loan amount (INR)
\( E \) — Prepayment amount (INR)
\( R \) — Monthly interest rate (annual rate / 12, as decimal)
\( N \) — Original loan tenure (months)
\( M \) — Number of months already paid
\( EMI_{new} \) — New EMI amount after prepayment (INR)

Explanation: The formula recalculates the EMI based on the reduced principal and remaining tenure after prepayment.

3. Importance of Prepayment Calculation

Details: Understanding how prepayments affect your EMI helps in financial planning. Prepayments can significantly reduce interest burden and loan tenure.

4. Using the Calculator

Tips: Enter original loan amount, prepayment amount, annual interest rate, original tenure in months, and number of months already paid. All values must be valid (principal > 0, prepayment ≥ 0, rate > 0, tenure > 0, paid ≥ 0).

5. Frequently Asked Questions (FAQ)

Q1: How does prepayment affect my loan?
A: Prepayment reduces your principal, which can either reduce your EMI for the same tenure or reduce your tenure for the same EMI.

Q2: Are there prepayment charges with HDFC?
A: HDFC typically charges 2-4% for prepayments above certain limits, but this varies by loan type and terms.

Q3: When is the best time to prepay?
A: Early in the loan tenure when interest component is higher. Even small prepayments early on can have significant impact.

Q4: Should I reduce EMI or tenure?
A: Reducing tenure saves more interest overall, while reducing EMI improves monthly cash flow. Choose based on your financial priorities.

Q5: How accurate is this calculator?
A: This provides a close estimate. For exact figures, consult your HDFC loan statement or relationship manager.