Home is the most basic need in any individual’s life. But due to the rising prices of real estate, a lot of people cannot pay the full price in one installment. To help such individuals, banks provide affordable home loan facilities. HDFC Bank is one of the leading private banks in India that provides home loan schemes to customers. But do you know that home loan customers can opt for the Balance Transfer Facility so that you can enjoy a lower HDFC Home Loan Interest rate? Well, you certainly can.
So what exactly is this Balance Transfer facility? Well, if we were to put it simply, individuals can transfer their outstanding principal outstanding amount to the HDFC Bank from some other lender.
For this facility, you will only need to pay a minimal processing fee that will depend on the principal amount. In this article, we will tell you about how HDFC Home Loan Interest Rate can make you save on Interest amount and also on the Monthly Installments. So, if you want to shift to a lower home loan interest rate, this article could be a suitable read for you. Keep reading!
How HDFC Home Loan Interest Rate affects the Balance Transfer Facility?
When you opt for the HDFC Home Loan Interest Rate, you could save a lot of money with the Balance Transfer facility. So, the question is how does interest rate affect the amount you can save with this facility. But first, there are a few basic things that you need to understand before opting for a Home Loan Balance Transfer facility.
First thing, it is important that you have been paying your Home Loan EMIs on time so that your repayment track is good. Such individuals have a higher probability as compared to people with a bad repayment track. Lenders also check the Credit Scores of individuals before providing this facility. Other than this, lenders also check your property location to authenticate the overall procedure.
How much money can you save with HDFC Home Loan Balance Transfer Facility?
After knowing so much about the Home Loan Balance Transfer facility, let’s know about how much money you can save with this. We are taking an example so that you can understand more clearly.
Let’s say an individual has a 15-year home loan of INR 30 lakh at an interest rate of 8.75% per annum. But after paying his EMIs for 6 years without any fail, he wants to shift to the HDFC Home Loan Interest rate of 7.50% per annum. For the loan amount of INR 30 lakh, he must be paying an EMI of INR 29,983. So, let’s see how much money he can save with this facility.
Estimated Interest Outgo for the Interest Rate of 8.75% per annum = INR 23,97,023
At this interest rate, the interest outgo until 6 years will be INR 13,94,584 and the principal outstanding balance will be INR 22,35,775.
On transferring this balance to HDFC Home Loan at the new interest rate, the EMI Amount would be INR 28,531
Similarly, the interest outgo will be INR 8,45,547 and the total interest outgo will be INR 22,40,131.
So, as you can see that on choosing the lower HDFC Home Loan Interest Rate, he can save INR 1,452 (29,983 – 28,531) per month on the EMI Amount and INR 1,56,892 (23,97,023 – 22,40,131) on the Interest Outgo.
You must remember that all of these calculations can be done by the HDFC Home Loan EMI Calculator. Just put a few basic details such as Required Loan Amount, Rate of Interest, and Tenure. And you’re good to go!