India’s largest private sector bank HDFC Bank has launched a Personal Loan with a Step-Up EMI repayment feature for its existing customers. The new Personal Loan offering is offered for existing bank customers looking out for temporary cash flow relief to meet the financial disruptions caused due to COVID 19 pandemic and subsequent lockdowns in the country.
Owing to existing uncertainties in the economy, the HDFC Step UP Personal Loan is an ideal product for customers as they can avail of unsecured funding at low EMIs amid the present cash crunch. The customers can borrow higher amounts at lower EMIs, particular in the initial phase of the loan.
Step Up EMI repayment structure is the repayment schedule wherein EMIs are low in the beginning of the tenure. The EMIs grow regularly at intervals, as mentioned in the loan contract.
The HDFC Step-up EMI repayment feature, will allow customers to service a lower EMI for 12 months. The EMIs will increase by 10% after completing a year. Thus the amount of instalment will increase with the tenor of the loan.
The step by step & moderate increase in EMIs will help you manage your current cash flows efficiently without stressing out your finances. You can borrow more at low cost EMIs for initial years.
Amidst liquidity crunch in the Covid Times, a Personal Loan from HDFC Bank will not stress your pockets.
| Product | HDFC Personal Loan with Step UP EMIs |
| Quantum | Minimum of Rs 5 Lakhs |
| Tenor | Flexible. Choose as per requirement. Tenure Options:
|
| Interest Rate | Step up rate of interest 10% increase in EMIs after 12 months |
| Eligibility Criteria |
|
| Documents Required | Minimal documentation required as this is open to eligible HDFC customers only |
You can apply for HDFC Personal Loan Online. The bank also offers Step UP Car Loan and Step Up Home Loan facility.
Now let’s understand how Step-Up Personal Loan EMIs would affect your repayment schedule. We have considered two examples for Rs 5 Lakhs & Rs 10 Lakhs Loan requirement for 5 years each.
Example: 1
| Loan Amount (Rs) | 5 Lakhs |
| Tenure (Months) | 60 |
| Starting EMI (Rs) | 9147 |
| Actual IRR | 11.25% |
Step-up EMI Calculation | |||
| EMI From | % Increase in EMI | Step up Personal Loan EMI (in Rs.) | Regular Personal Loan EMI (Without Step UP option) (in Rs.) |
| 1-12 Months | 0 | 9147 | 10934 |
| 13-24 Months | 10% | 10062 | 10934 |
| 25-36 Months | 10% | 11068 | 10934 |
| 37-48 Months | 10% | 12175 | 10934 |
| 49-60 Months | 10% | 13392 | 10934 |
Thus you will pay a total of Rs 21444 lesser in the first year of Step Up loan. The EMI from third year will begin to rise. It is expected that the current financial challenges may impact business for next 6-12 months. Thus you will get enough cash flow ease with the step up EMIs.
Example: 2
| Loan Amount (Rs) | Rs 10 Lakhs |
| Tenure (Months) | 60 |
| Starting EMI (Rs) | 18294 |
| Actual IRR | 11.25% |
Step-up EMI Calculation | |||
| Year wise Tenor | % Increase in EMI | Step up Personal Loan EMI (in Rs.) | Regular Personal Loan EMI (Without Step UP option) (in Rs.) |
| 1-12 months | 0 | 18294 | 21867 |
| 13-24 months | 10% | 20124 | 21867 |
| 25-36 months | 10% | 22136 | 21867 |
| 37-48 months | 10% | 24350 | 21867 |
| 49-60 months | 10% | 26785 | 21867 |
Reshma Rawat is a passionate writer with a decade of experience in writing for a variety of domains (finance, technology, lifestyle, e-commerce, real estate, etc.). Currently, she is working as Assistant Manager - Content @MyMoneyMantra and writes blogs & webpages on financial products (loans, credit cards, insurance, government financial policies, mutual funds, etc.).
Director- MyMoneyMantra FinTech| A senior retail and commercial banking professional, adept at handling Business Development, Sales Planning & Growth, Product Strategy, Marketing Operations and Client advisory services phygitally.
Top 5 Credit Cards
Joining Fee: Nil
Joining Fee: Nil
Joining Fee: Nil
Joining Fee: Nil
Joining Fee: 499+
Your feedback is valuable to us. Thank you for taking the time to share your thoughts!
