HDFC Home Loan Interest Formula:
From: | To: |
The HDFC home loan interest calculation uses the simple interest formula to determine the monthly interest payable on your home loan principal balance. This helps borrowers understand how much of their monthly payment goes toward interest.
The calculator uses the simple interest formula:
Where:
Explanation: The formula calculates the interest portion of your monthly payment by multiplying the current principal balance by the monthly interest rate.
Details: Understanding your monthly interest helps in financial planning, comparing loan options, and making informed decisions about prepayments to reduce interest burden.
Tips: Enter your current principal balance in INR and the annual interest rate percentage. The calculator will show the monthly interest amount.
Q1: Is this the actual EMI calculation?
A: No, this shows only the interest portion. EMI includes both principal and interest components calculated differently.
Q2: How often does HDFC calculate interest?
A: HDFC typically calculates interest monthly on reducing balance method.
Q3: Does this account for floating vs fixed rates?
A: The calculation works for both, but remember floating rates may change during loan tenure.
Q4: How can I reduce my interest payments?
A: Making prepayments reduces principal, which directly reduces future interest calculations.
Q5: Are there tax benefits on home loan interest?
A: Yes, under Section 24(b) of Income Tax Act, up to ₹2 lakh interest can be claimed as deduction.