You must have been aware of HDFC Personal Loan and its capabilities of meeting your financial requirements. HDFC Bank offers you a maximum personal loan of INR 40 Lakh at an interest rate of 10.25% per annum onwards. The bank offers you the facility of full and part prepayment. With this one can reduce the loan burden. How? If you choose this option, you need to pay a portion of the loan amount or the whole loan balance. When you do full or part or prepayment, the interest component of the loan reduces substantially. Read this article and learn about this facility of HDFC Personal Loan.
HDFC Personal Loan Part Prepayment
Let’s discuss the HDFC Personal Loan part prepayment first. In this, the borrower has to pay a part of the loan balance. And the maximum amount you can pay is 25% of the principal outstanding. Using this, you can gradually reduce the payment burden.
You can do HDFC Personal Loan Part Prepayment once in a financial year and twice during the repayment period. So, use this facility wisely and reduce your interest payout. To know more, take a look at the example below.
Tarun borrowed HDFC Personal Loan for his wedding. And after a year’s repayment, he decides to reduce the loan balance. Fortunately, Tarun invested money in mutual funds and FDs, which helped him pay a lump sum amount to reduce the loan balance. Check out the loan details below –
- Loan amount – INR 8 Lakh
- Interest rate – 16.00% per annum
- Tenure – 6 years
- Total Paid Amount (Principal + Interest)- INR 2,33,453
- Total Paid Interest – INR 1,19,913
- Remaining Interest – INR 2,47,354
- Loan Balance – INR 6,86,459
- Amount Tarun Saved – INR 70,000
- Maximum Part Prepayment Allowed – INR 1,71,614
Let’s see how much will be the loan balance and total interest after the part prepayment –
- Loan Balance – INR 6,16,459
- Total Interest – INR 2,22,131
So, the amount Tarun saved post part payment of HDFC Personal Loan is INR (2,47,354 – 2,22,131) = 25,223.
HDFC Personal Loan Full Prepayment
Here, the borrower needs to repay the whole loan balance. So, use the HDFC Personal Loan EMI Calculator and plan for a prepayment wisely. Because the aim of doing this is to save some money from your repayment. With the example below know more about this HDFC Personal Loan facility.
Sneha has been paying HDFC Personal Loan EMI for two years continuously and in the meantime, she has invested money in various instruments like PPF, FD and mutual funds. And at the end of the 2nd loan year, she has saved INR 3 Lakh. Now to check her savings amount she uses the EMI calculator.
- Total Payable Interest without prepayment – INR 1,58,438
- Paid Interest – INR 95,697
- Loan Balance – INR 2,72,321
After prepayment, Sneha will be saving INR 62,741 (1,58,438 – 95,697)
What are the Applicable Charges for HDFC Personal Loan Full and Part Prepayment Facilities?
You need to pay the following fees along with the full or partly paid amount –
- 13 to 24 months – 4% of the principal outstanding for prepayment and 4% of the part prepayment amount
- 25 to 36 months – 3% of the principal outstanding for prepayment and 3% of the part prepayment amount
- More than 36 months – 2% of principal outstanding for prepayment and 2% of the part prepayment amount
HDFC Personal Loan Full and Part Prepayment Methods
You can fully or partially prepay the loan amount using a cheque of the balance amount + applicable fees and GST. Visit the bank branch, fill in the prepayment application form, and submit the duly filled application form and cheque. When the request is approved and the amount is debited from your bank account, visit the branch and collect the NOC. Note – You’re allowed to do full or part prepayment after 12 continuous EMI payments.