Everything You Need to Know about HDFC Home Loan

When you decide to buy a house, you are making one of the biggest decisions of your life. It is an important decision and hence demands careful planning and consideration. Not only do you need to have enough funds to pay as down payment, but you should also have enough regular income to be able to pay off any loan you take on to pay the balance. Who you take the loan from is another big decision and requires you to look at multiple aspects. Here, we shall tell you all you need to know about HDFC Home Loan and its features:

What Can You Use the Home Loans For?

Whether you are planning to buy a new house from a private builder or development authorities, you can go for a loan from HDFC, provided the project has received adequate approvals. You can avail the loan even if you choose to buy a house as a resale of property or plan to construct your own house. You can also avail a home loan if you wish to renovate your house or extend it.

What Are the Interest Rates Charged?

Under the adjustable rate home loan scheme, the HDFC home loan interest rate varies from 8.85% to 9.55%. Under the 2 years fixed rate variant, the rates vary from 9.35 to 10.05. Rates for women are lower by 0.05%. You can refer to the HDFC Home loan calculator for the rates applicable as per the slab of loan required.

Who Is Eligible for Loan?

Any resident Indian with a steady source of income in the age group of 18-65 years can apply for a loan from HDFC. You can also apply jointly for a loan with a co-applicant. By doing this, you can maximize the loan eligibility amount. Having a female co-applicant can get you better interest rates. The co-applicants do not need to be co-owners, but all co-owners need to be co-applicants.

How Much Loan Can You Get?

The loan amount eligibility depends upon the property value and your capabilities in terms of existing funds and repayment options. If you are planning to buy a property of 30 lacs or lower, you can get up to 90% funding. A property priced in the range of 30.01 – 75 lacs can get you up to 80% and if it is above 75 lacs, you can avail a maximum 75% funding. The exact amount considering all the factors can be calculated with the help of HDFC home loan eligibility calculator.

What Is the Repayment Period for the Loan?

The maximum tenure you can get for repayment is 30 years under the adjustable rate home loan with the telescopic repayment option. In all other cases, the maximum tenure is 20 years. This will also depend on the age of the customer and age of the property at the time of maturity of the loan. The EMI will also depend on this tenure. You can use the HDFC home loan EMI calculator to know the exact value.

What Documents Do You Need to Submit?

Along with the filled in application form, you will need to submit:

1. Proof of Identity and Proof of Residence for Applicant and Co-Applicant: You can submit Aadhar Card, Passport, Voter’s ID or a Driver’s Licence.

2. Property Documents: These will vary based on the kind of property.

 — For new homes, you will need to submit a copy of the allotment letter/buyer agreement and receipts of any payments made to the developer

 — In the case of a resale, you will need to submit a copy of the agreement and receipts of initial payments

 — If you are constructing the house, you will need proof of no encumbrances, a copy of the approved plans and a construction estimate by an architect or a civil engineer

3. Proof of Income:

For Salaried Employees

 — Salary slips of the last 3 months

 — Bank statement with salary credits for the last 6 months

 — Latest Form-16 and Income Tax Return

For Self Employed (submit for individual and business entity)

 — IT returns with a computation of tax for the last 3 assessment years

 — Balance sheets and profit & loss statements for the last 3 years

 — Savings accounts and current account statements for the last 6 months

4. Other Documents

 — PP size photographs of all applicants
 — A cheque favoring HDFC Ltd. covering the processing fees

Salaried Employees

 — Employment Contract / Appointment Letter

 — Bank statements of last 6 months showing any debts for existing loans

Self Employed

 — Business Profile

 — Latest Form 26AS

 — Details of shareholders

 — Documents relating to the formation of the company

 — Partnership deed

 — Details of any on-going loans (individual and business)

What Are the Applicable Charges?

Other than the interest, you could be paying the following

 — The processing fee is charged depending on the loan amount and the category of the customer.

 — Statutory/Regulatory charges

 — Any external opinion will also incur a charge payable directly

 — Property insurance premiums have to be paid regularly to keep it alive

 — Delayed EMIs will incur additional interest

 — Incidental charges in case of defaulters

 — Additional money could be charged for certain additional services

What Are the Charges for Foreclosing a Loan?

There is no penalty for prepayment of HDFC home loan if you are an individual borrower on the Adjustable Rate Home Loan Scheme. If you have a company for a co-applicant, you could be paying 2%+taxes on the prepaid amount.

No penalty will be charged for foreclosure for Fixed Rate Home Loans if the payment is made from own sources and is not a result of a balance transfer in which case it will be charged at 2%.

What Are the Available Repayment Options?

1) Step Up Repayment Facility (SURF): You pay lower EMIs in the initial years and is accelerated in the subsequent years keeping your growth in mind. This is available only for salaried individuals.

2) Flexible Loan Instalments Plan (FLIP): In this case, you pay higher EMIs initially and lower in the subsequent years. This is also available only for salaried individuals.

3) Tranche-Based EMI: You can choose to start paying off the principal right from the start even in case of under-construction property.

4) Accelerated Repayment Scheme: EMIs increase every year in proportion with the income for faster repayment of the loan.

5) Telescopic Repayment Option: You get the option to extend the tenure to 30 years for a larger loan and smaller EMIs.

Conversion Facility

This is offered to the existing customers wherein they can switch between the various schemes for a nominal charge.

With the range of loans available, you can use the housing loan interest calculator to figure out which loan scheme would suit your needs the best.

Author Since: Jan 17, 2019

Anoop Bansal, a professional Chartered Accountant based in the National Capital - Delhi. I have worked for the top-notch Indian and International banking firms for the past 10 years. Currently, I work at emi-calculator.loan blog and a financial consultant for different SMEs in India. Follow me on Facebook, Twitter and Linkedin for more information.

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