HDFC Bank Personal Loan Interest Rates (May 2020)
|HDFC Personal Loan
||Rs. 50,000 to Rs. 75 lakhs
||Rs. 50,000 to Rs. 50 lakhs
||12 months to 60 months *Tenure extended to 72 months for Golden Edge Offer
||12 months to 48 months
|Lowest Interest Rate
||0.99% to 2.50%
||0.99% to 2.50%
|Part Prepayment Charges
||2% to 4%, allowed after 12 EMIs
||2% to 4%, allowed after 12 EMIs
||2% to 4%, allowed after 12 EMIs
HDFC Personal Loan Interest Rate is as low as 10.75%. The lowest EMI for Rs. 1 lakh is Rs. 2,162. The HDFC Bank has several loan schemes for salaried individuals and self-employed professionals, people drawing high income, women entrepreneurs, government employees, pensioners, defence personnel, and many more. Apart from the charges given above, the bank may also apply charges for late EMI payment, loan cancellation, cheque bounce, etc. All the information related to rates and charges will be disclosed upfront in the loan agreement. There are no hidden charges.
HDFC Personal Loan Prepayment Charges
You can choose to prepay the HDFC Bank personal loan amount. If you want to prepay the outstanding amount before the stipulated tenure, then you have to bear a pre-closure or prepayment charge. The fee that you have to pay depends on the time period when you plan for prepayment. For HDFC unsecured personal loan, you can prepay only after the first 12 EMIs.Prepayment Charges
|13 to 24 Months
||4% of the principal outstanding
|25 to 36 Months
||3% of the principal outstanding
|Above 36 Months
||2% of the principal outstanding
Illustration of Personal Loan HDFC
Here is an example for the total cost of personal loan HDFC Bank:
- Annual Percentage Rate: 10.75% to 22%
- Total Principal Amount: Rs. 1 lakh
- Processing Fee: Rs. 2,000
- Tenure: 12 months to 60 months
- Fee to Loanbaba: No fee
- Minimum EMI: Rs. 2,162 for 60 months tenure at 10.75%
- Maximum EMI: Rs. 9,359 for 12 months at 22%
- Total Cost for Entire Tenure: Rs. 31, 720 for 60 months and Rs. 14,313 for 12 months
Interest Rates and Charges for HDFC Personal Loans
Below-given is a brief about different personal loan schemes by HDFC Bank and the associated rates and charges:
1. HDFC Bank Insta Loan and Insta Jumbo Loan
Insta Loan and Insta Jumbo loan are offered on the credit card limit. These are personal loans against credit cards. These are pre-approved offers. In HDFC Insta loan, you can borrow an amount within the allotted credit limit. In HDFC Bank Jumbo loan, you can get an amount over the allotted credit limit. This amount is without blocking the amount allowed for spending on your credit card.Considering 1.25% per month as the rate applied, here is an illustration of the EMI calculation.
|Rs. 1 lakh
|Rs. 2 lakhs
|Rs. 3 lakhs
|Rs. 4 lakhs
|Rs. 5 lakhs
2. HDFC Bank Golden Edge Offer
This is a personal loan offer for high-income applicants with a monthly salary Rs. 75,000 and above. If there are co-applicants, even they should have a minimum net monthly salary of Rs. 75,000 and more. The loan amount is between Rs. 10 lakhs and Rs. 40 lakhs. Here is a brief about how the interest rate and processing fee works for this deal.
|Rs. 20 lakhs and more
||For an amount more than Rs. 20 lakhs:
HDFC account holder: 0.50
Non-account holder: 0.75
|Rs. 10.99 lakhs and more
||Above Rs. 10.99 lakhs to Rs. 19.99 lakhs
HDFC account holder: 0.50
Non-account holder: 0.99
3. HDFC Professional Loans
The personal loan for professionals is offered to Doctors, Company Secretaries practicing or consulting, Architects, Physiotherapists, Chartered Accountants, etc. The borrowing amount is up to Rs. 50 lakhs (Rs. 75 lakhs for specific locations). Below-provided is a list of the associated interest rates and charges.
|Range for Rack Rate Interest
||Between 12.50% and 15.65%
Up to 2.50% of the loan amount
Minimum fee is Rs. 2359
Maximum fee is Rs. 88500.
Prepayment is allowed after payment of the first 6 EMIs
4% of principal outstanding: Tenure 7 to 24 months
3% of principal outstanding: Tenure 25 to 36 months
2% of Principal Outstanding: Tenure above 36 months
|Credit Assessment Charges
|Loan Closure Letter
|Cheque Swapping Charges
|Cheque Bounce Charges
||Per bounced cheque Rs. 550
|Duplicate Loan Closure Letter
|Late Payment Charges
||2% per month on EMI of the overdue principal
Minimum charges Rs. 200
|Charges for changing from fixed to floating rate of interest, and vice-versa
|Stamp Duty and other statutory charges
||Applicable according to the law of the State
|Non standard repayment charges
|Amortization Schedule charges
|Loan cancellation charges
NOTE: Interest will be charged for the interim period from the loan disbursement date and loan cancellation date. The processing fee will not be refunded as well.
HDFC Personal Loan EMI Calculation
Equated Monthly Instalment or EMI is a repayment amount to pay towards your personal loan. EMI is a single portion of the equally divided monthly payments till the decided tenure to clear the interest payout and borrowed principal. The formula to calculate Equated Monthly Instalment is:
EMI = [P x R x (1+R) ^N]/ [(1+R) ^N-1]
Here: R stands for the rate of interest, P stands for the borrowed amount, and N stands for the number of monthly instalments. Here is an illustration of HDFC personal loan EMI at different tenures and loan amounts at 10.75%.
|Rs. 1 Lakh
|Rs. 3 Lakhs
|Rs. 5 Lakhs
|Rs. 10 Lakhs
Every EMI comprises two components: the principal repayment and interest payment. The EMIs may remain the same every month. But, there is a shift in the interest proportion and the principal repaid. As you keep paying the EMIs, the principal proportion for repayment increases, and the interest proportion reduces.
From the above example it is evident that EMI differs for loans depending on the loan amount and the rate of interest.
Look carefully and you will see that there is a difference between EMI for 5 years, 3 years, and 2 years.
The total interest payout on the entire tenure of 5 years, 3 years, and 2 years is: Rs. 29,720, Rs, 17,432, and Rs. 11,576, respectively.
The total amount you repay to the bank including the interest and principal over 5 years, 3 years, and 2 years is: Rs. 1.30 lakhs, Rs. 1.17 lakhs, and Rs. 1.12 lakhs, respectively.
The monthly instalments are thus higher on a shorter tenure, and lower on a longer tenure.
Factors that Influence HDFC Bank Personal Loan EMI
Below-given are the factors that impact the personal loan EMIs:
- Interest Rate: A lower rate of interest will lower your EMIs along with the total cost of the loan. The HDFC Bank offers lowest rates for salary account holders. Lower rates also decrease the overall cost of the loan. The starting rate of interest is 10.75%. But, the rates may differ from a personal scheme to another. Also, the interest rate is influenced by your individual profile, income, age, repayment capacity, credit history, location, ongoing EMIs, loan amount, and tenure.
- Loan Amount: The principal amount is the loan amount you borrow from the bank. A lower loan amount will translate into lower EMIs, and vice-versa. HDFC Bank offers a minimum of Rs. 50,000 and maximum of Rs. 75 lakhs as the loan amount.
- Loan Tenure: The selected tenure is the one in which you have to completely repay the personal loan. The repayment includes both the principal borrowed and the interest payout. A longer tenure translates to lower EMIs, but a higher overall interest payout. A shorter tenure means higher EMIs, but a lower overall interest payout. HDFC offers tenure between 12 months to 60 months. In some cases, the tenure can extend up to 72 months.Choose tenure as per your repayment capacity. Now that you know that a shorter tenure will mean a lower interest payout but larger EMI, try and choose the shortest possible tenure. But if you find it difficult to manage larger EMIs, then you may want to choose a longer tenure.
Frequently Asked Questions about HDFC Bank Personal Loan Interest Rate
Below-given are FAQs on personal loan rates by HDFC Bank:
HDFC Bank offers lower rates to existing customers and salary account holders. Salaried individuals working with top and reputed companies or firms from a higher-ranked company in the category listing prepared by the bank, will also get some discount on the standard rate. For instance, HDFC Bank Personal Loan Diva is an offer for women entrepreneurs. Here the applicant is supposed to have a good rapport with the bank to avail special offers and discounts. The customer is offered 100 Diva offers that can be redeemed easily.
Another factor that influences interest rate is your CIBIL score. The bank will check your credit history and past repayment records to determine your creditworthiness. You are expected to have a clean repayment record for maximum benefits. If you have outstanding dues or defaults, then the chances of getting the lowest rate may get hampered. A good CIBIL score will help to secure the best rate of interest rate and offer. You should have a CIBIL score of more than 750 to apply for a personal loan.
Besides a good rapport with the bank, employer’s ranking in the company category list prepared by the financial institution, and your CIBIL score, there are other factors that influence the rate applicable. As understood from the above examples, it is the loan amount and tenure that has a great impact on the total interest payout. A higher loan amount and longer tenure may however carry a lower rate.
Yet, you may choose a shorter tenure despite the rate applied, to quickly repay the loan, and save on the interest payout.
Also, reduce the existing financial liabilities and curtain unnecessary expenses to boost your disposable income.
Higher the disposable income, lower interest rate can you expect.
The HDFC personal loan processing fee is between 0.99% and 2.50% of the loan amount. There are personal loan schemes wherein the processing fee is completely waived. This is especially true for existing customers with excellent rapport with the bank or loan schemes for high-income applicants. Keep a check on the loan details and the fees when applying for a particular scheme with the bank.
The penalty charges only apply if you do something that makes you liable to pay the additional costs. The processing fee is not a penalty charge but a mandatory fee. It is also non-refundable. Penalty charges are the ones applicable on late EMI payments, loan cancellations, cheque bounces, etc. So, if you pay EMIs in a timely manner, do not cancel the loan after its sanction, or keep enough balance in your bank account for EMI deduction, then you can avoid these charges.
There are charges for special services too. For instance, you change the mode of repayment or ask for an additional service over and above that mentioned free-of-cost in the loan agreement.
In this case, you have to pay a small fee. But these are not accountable as penalty charges. These are the fees you pay for obtaining the said services.
A fixed interest rate means that the interest rate will not change throughout the tenure. Thus, the EMIs will also remain unaffected with no changes in the rate. On the other hand, a floating interest rate rate (also known as variable interest rate), changes as per the bank’s lending rate. When the repo rate decreases, the lending rate shall also reduce, and vice-versa. So when choosing between the types of rates applicable, be careful and analyze all the costs.
An unsecured loan, like a personal loan, is where the bank does not require security or collateral. A secured loan is the one where the bank requires security or collateral. In an unsecured personal loan, it is your creditworthiness, income, and repayment capacity that determines the loan amount, tenure, and the interest rate. In a secured loan, besides these three factors, it is also the value of the secured asset that determines the loan amount, rate, and tenure.
If you default on a secured loan, the bank can gain ownership on the secured asset and recover the outstanding dues. But, this is not the case in unsecured loans.
Interest rates for unsecured personal loans could be higher than rates for secured loans.
This is because there is no asset that the bank can rely on for recovering the dues if you default at repayments. The difference in rates is often negligible.
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