HDFC Loan Against Property EMI Calculator

HDFC, the premier housing finance institution in India, offers different types of non-housing loans, such as:

Loan Against Property: Personal loan against residential and commercial properties to meet business and individual needs.
Commercial Property Loans: Loans to purchase commercial properties like shops and industrial galas.
Commercial Plot Loans: Financial assistance to buy plots of land for commercial development

Additional Info: Apply SBI MaxGain Home Loan @6.70%

A Loan Against Property differs from a home loan in various respects:

• A home loan is a financial assistance for purchasing or constructing your house or flat, whereas a Loan Against Property is a loan against an existing property, residential or commercial.
• A home loan involves the creation of an asset, whereas a property loan is against an existing asset.
• The purpose of the property loan can be to meet business and individual needs. Individual needs can be anything ranging from medical expenses to education of children, and marriage expenses to going on a holiday tour.
• As the purpose of the Loan Against Property is for meeting individual needs, the interest rate on such loans is higher than that of housing loans.
• Housing loans have an extended repayment tenure that could extend up to 30 years, whereas loans against property have a repayment mandate of 15 years.
• The LTV ratio of a housing loan can be in the range of 75% to 90% of the value of the property. In the case of loans against property, the LTV ratio should not be more than 50% for new customers and 60% for existing customers.

You can also Apply for 50 Lakh Home Loan

As with home loans, the ideal mode of repayment of Loan Against Property is the EMI. The EMI concept is the most effective of all repayment methods. HDFC has different ways of repayment for home loans depending on the age of the borrower, the repaying capacity, the income generation, and the repayment tenure.

The EMI Concept

EMI represents Equated Monthly Instalments. The very term suggests that the instalment should be equal every month for a given set of circumstances. The EMI depends on the following factors:

• The loan amount
• The rate of interest applicable to the loan
• The loan repayment tenure

Any change in the above three factors affects the EMI.

• An increase or decrease in the loan amount causes a corresponding change in the EMI
• Similarly, the rate of interest is also directly proportional to the EMI amount
• In the case of repayment tenure, the EMI decreases as the tenure goes up, and vice versa

The EMI comprises two components:

• Principal Repayment Component
• Interest Repayment Component

As the EMI remains constant for every set of specific parameters, the principal and interest repayment components vary accordingly. In the initial stages, the interest component is substantially high. As the borrower keeps repaying the EMIs on time, the interest component keeps reducing. Simultaneously, the principal component keeps on rising gradually. Therefore, the loan gets repaid over its entire tenure.

Additional Info: Also check Rs. 1 Crore Home Loan EMI

Calculating the EMI can be a challenging procedure. Generally, HDFC arrives at the EMI and mentions the same in the sanction letter. However, the borrower should know the formula for calculating the EMI. It will enable the borrower to determine whether the lender's calculation is accurate or not.

One of the easiest ways of determining the EMI is to use the HDFC LAP EMI Calculator.

• HDFC offers a home loan EMI calculator on its website. The formula for calculation of the EMI for a Loan Against Property is the same for all loans.
• Visit the website and proceed to the Home Loan EMI Calculator
• Use the slider option to enter your loan amount. Alternatively, you can input the figure directly, as well.
• Similarly, input the loan tenure in years and the applicable rate of interest in percentage per annum.

On doing so, you get the following results:

• Monthly EMI
• Principal amount
• Interest amount
• Total amount payable

Click on the 'View Details' option to get the loan amortization schedule. This schedule shows the details of the payment of the EMI annually. It also displays the breakup of EMI into interest repayment and principal repayment over the entire tenure. You can notice that the appropriation towards the interest component is more in the initial years. As you go deep into the mandate, the principal repayment component increases gradually.

An example of calculation of EMI for the HDFC Loan Against Property

Consider the following assumptions:

• Loan Against Property Amount - 25 Lakhs
• Tenure of the loan - 15 years
• Rate of interest - 11% per annum

On entering this data into the EMI calculator, you get the following results instantaneously:

• EMI Amount 28,415.00
• Principal Amount - 25 Lakhs
• Interest Repayment - 26,14,688
• Total repayable amount - 51,14,688

Click on the view details to get the loan amortization schedule.

Inference

• The EMI remains constant throughout the tenure for the specific rate of interest
• The interest repayment component is the highest in the first year. It reduces gradually in the initial stages. As the repayment tenure comes to an end, it reduces drastically.
• Similarly, the principal repayment component is the least in the initial stages. It increases as you keep repaying the EMI.
• Over the entire tenure of 15 years, the loan gets closed

Additional Info: Also check 75 Lakh Home Loan EMI

The formula for calculating the EMI remains the same. You can calculate the EMI at the MyMoneyMantra website, as well.

• Visit the official webpage of MyMoneyMantra
• Go to Financial Tools
• Select EMI Calculator
• Input the data such as loan amount, rate of interest, and loan tenure
• Click on Calculate option to get the EMI
• The calculator also gives a graphical representation of the total interest and principal amount repayment throughout the entire tenure.

Calculate Your EMI Using MS Excel Tables

Apart from the online EMI calculators, you can calculate the EMI of your Loan Against Property using MS Excel tables.

• Use the PMT function for calculating the EMI in MS Excel.
• The syntax is = PMT(Rate, Nper, PV)
• Rate - the rate of interest (it should be the monthly rate. For example 12% per annum = 1% per month or 0.01 if you use Excel table)
• Nper - no of instalments (months)
• PV - Loan amount, also known as Present Value

Calculate the EMI using the mathematical formula

EMI = (P * R/12) * [(1+R/12)^N] / [(1+R/12)^N-1]

• P = the principal amount of the loan
• R = Annual rate of interest
• N = Number of monthly instalments

Additional Info: Also check Pan Number for Banks

HDFC offers alternate repayment options in the home loan to borrowers depending on their income generation. This facility is generally not available on Loan Against Property.

Step-Up Repayment Facility

This facility is useful for young borrowers who avail home loans early in life. In the initial stages of the career, the income would be at a lower level. It increases with the annual increments and promotions. HDFC offers a unique facility where the EMI is lower in the initial years. It rises in proportion to your income in the subsequent years. This facility allows young borrowers to avail a higher amount of loan.

Flexible Loan Instalment Plan

This facility is the opposite of what we have discussed above. The EMI is higher in the initial years and reduces proportionately with a subsequent decrease in the income. It is ideal for people who avail loans close to their retirement period. The pension amount they could receive will be lower than their monthly salary. This method of repaying EMI suits such people the best.

Tranche Based EMI

The tranche-based EMI concept is available in the case of home loans availed for properties under construction. Generally, you pay the interest on the amounts of loan disbursed during the construction stage and start the EMI after the full disbursement. However, you can tranche the loan and start paying the EMIs immediately without waiting for the total disbursement.

Accelerated Repayment Schedule

This option provides you with the facility of increasing your EMIs every year in proportion to your income. It can result in faster liquidation of the loan.

Telescopic Repayment Schedule

Borrowers get an extended repayment tenure up to 30 years with this option. As the tenure is longer, you have a smaller EMI, thereby entitling you for a bigger loan.

Additional Info: Also check ICICI Home Loan EMI Calculator