HDFC Home Loan New Interest Rates(January 2017)

Create a Space of your own with HDFC Home Loans. As expected, after SBI reduced the home loan interest rate, HDFC slashed its interest rates too.

hdfc-home-loan-interest-rate_loanyantra-comHave a look at the HDFC home loan new interest rates.

RPLR – 16.30%

Loan Slab Interest Rates (% p.a.) RPLR Minus Spread
For Women (upto 75 lakhs) 8.65 to 9.15 RPLR – (7.65 to 7.15)
For Women (above 75 lakhs) 8.70 to 9.20 RPLR – (7.60 to 7.10)
For Others (upto 75 lakhs) 8.70 to 9.20 RPLR – (7.60 to 7.10)
For Others (above 75 lakhs) 8.75 to 9.25 RPLR – (7.55 to 7.05)
Who Can Apply

You can apply individually or jointly for HDFC Home Loans. All proposed owners of the property will have to be co-applicants. However, all co-applicants need not be co-owners. Generally co-applicants are close family members.

Loan Term
  • The maximum period of repayment of a loan shall be up to 30 years for the Telescopic Repayment Option under the Adjustable Rate Home Loan. For all other Home Loan products, the maximum repayment period shall be up to 20 years.
  • The tenure of the loan is also dependent on the customer’s profile, age of customer at maturity of loan, age of property at loan maturity, depending upon the specific repayment scheme as may be opted and any other terms which may be applicable based on prevalent norms of HDFC.
hdfc-home-loan_loanyantra-comProcessing Fees

Up to 1.25% of the loan amount or ₹ 3,000 whichever is higher, plus applicable taxes.

Prepayment Charges

Prepayment charges at a rate of 2% plus Taxes and Statutory levies and charges, as may be applicable from time to time, of the amount being prepaid are payable.

Conversion Fees

The fee payable to avail the conversion shall be 0.50% plus applicable taxes of the principal outstanding plus the undisbursed loan amount or Rs.50,000 plus applicable taxes, whichever is lower.

Property Insurance

Property Insurance is compulsory and the customer shall pay the premium amounts directly to the insurance provider, promptly and regularly so as to keep the policy / policies alive at all times during the pendency of the loan.

HDFC Home Loans Under Pradhan Mantri Awaaz Yojana

Interest subsidy of 6.25% p.a. upto a loan amount of Rs. 6 lakh 15 years or hdfc-awaaz-yojana-_loanyantraactual term, whichever is lower. And Family Income should not exceed Rs. 6 lakh per annum.

 

The rate cut comes after a nudge from Prime Minister Narendra Modi in his year-end speech, where he said that massive inflow of deposits spurred by the demonetization of high-value banknotes has led to a significant reduction in the cost of funds.

“Over the past couple of months we have seen a drop in our marginal costs of funds and as always HDFC has ensured that benefit is passed on to its customers,” said Renu Sud Karnad, Managing Director, HDFC.

For further reduction in interest rate, logon to www.loanyantra.com and get 0.10% discount for one year. For those who already logged in, get free loan management till the closure. Enjoy the cash back benefits by referring your friends.

 

Credit Score and Home Loan

All that you should know about credit score

Buying your dream home is a dream come true and home loans have made it very easy for people to buy a home but, as easy it appears, home loan approval involves a series of steps and eligibility criteria which you need to fulfill to get the loan from the bank.

Banks and HFCs take into account a number of factors that define your eligibility for loan approval. One of the key parameters is CIBIL score or credit rating. Credit Score defines your credibility and how good you are in repaying your credit bills and EMIs. In other words, it describes how good is your financial health which in return increases the probability of your loan approval.

Detailed understanding of credit score –

CIBIL stands for Credit Information Bureau India Limited. This organization came into existence in August 2000 and looks after the credit ratings. It collects and maintains credit records of individuals as well as commercial entities. The credit records the borrowing payment relation. This includes all payments and borrowing related to loan or credit card.

On the basis of information collected, CIBIL assigns your credit score or CIBIL rating which banks reviews before approving the home loan. It’s a credit score of three digit numeric summary of your credit history. The credit score varies between 300-900.

Your credit report is available with CIBIL and can be availed by paying a nominal fee.

The credit report includes the following:

  • The history of the credit availed by you
  • Record of all the loans repaid by you and your credit card bill repayments
  • Late payments or penalties on past credit
  • Latest information about loan application and credit application by you
How Credit Score affects home loan eligibility?

Your credit score plays a key role in home loan approval. Once you submit the application for a home loan, bank checks your credit score and reviews your credit history.

Thus, if you have a good credit score, your home loan application will be processed faster, on the other hand, a poor credit history and score might get your application rejected.  Well, there is no universal score, every bank and HFC has different criteria and minimum credit score. But generally, a credit score above 750 is considered good by the majority of financial institutions. The score in the range of 350-750 is considered average or poor. Thus make sure that you check your credit score before applying for a loan.

credit-score-for-homeloan_loanyantraYour credit score reflects the following:

750-900    

  • Good score
  • You are likely to get loans at good interest rate
  • Both secured and unsecured home loans  can be easily availed by you

700-750    

  • Decent score
  • You are likely to get the loan from most of the banks but for unsecured loans, banks might conduct further review

550-700    

  • Low score reflecting delay in payment or irregular payment
  • Banks are usually dicey about approving loan
  • You might get your loan approved by some loan provider but at a higher collateral and low LTV
  • You might have to pay a higher interest rate

300-500

  • Poor score
  • Difficult to get loan especially from an established Bank or HFC
How is a Credit Score Calculated?

By now, we know that credit score plays a key role in home loan processing and approval.  You can check your credit rating on CIBIL’s official website by paying a nominal fee of around Rs. 470.

CIBIL’s Credit Score is calculated based on the following factors:

  • Repayment history of applicant: This accounts for 35% of the score. Hence make sure that you have cleared all your bills and loans. This helps in maintaining a good repayment history.
  • The credit balance:  This accounts for 30% of your credit score. This includes two factors, first how much credit has been sanctioned to you and second how much of that limit you have used. The credit utilization ratio is the balance which is outstanding on your loans and credit cards. If you have used most of the credit limit, you are considered a risky customer.
  • The duration of time for which you have used credit: This accounts for 15 % of the credit score. If you have taken for a long term and have been repaying the EMIS on time, it positively affects your credit score.
  • Application for new credit or availed new credit: This accounts for 10% of the score. Every time you make an application for credit, the lender checks your credit and if there are too many credit inquiries in line it can negatively impact your score.
  • Credit mix: This contributes 10% of the it. You should have a mixed bag of secured and unsecured loans, having a mix of both increases your credit score.
What if my credit score is low, how will I improve it?

There is a probability that your credit score might be low and bank rejects your application. However, this can be avoided if you work on the following steps:

  • Check your credit report regularly- Make sure you check your credit report regularly. It intimates you about any kind of defaults or delayed payments so that you can rectify it on time.
  • Timely repayment – The best way to keep your credit score right is repaying your credit on time. Timely and responsible payment affects your credit score positively.
  • Do not consistently apply if your credit has been previously rejected- In case your application has been rejected, give yourself some buffer time and then apply. Too many applications at a time can negatively impact your credit score.
  • credit-score-repair_loanyantra-comEnsure that you have a mixed bag of loans- While applying for loans do check that you have availed both secured and unsecured loans. Secured loans include car loans or home loans and unsecured loans include personal loan and your credit card as well.  Having both kinds of loans impacts your credit score positively.
  • Beware of joint application – In case you become a joint applicant with someone and that person defaults or have a poor credit score it might affect your credit score as well.

Always ensure that you are positive w.r.t Credit Score. Once you are on a safe side, it shows you are eligible for any kind of loan.

Know more tips about credit score and the impact on home loan by signing up with us.

Demonetisation effect on Home Loans

Demonetisation effect on Home Loans was seen from Jan-1st-2017, when SBI made a announcement of it’s forth-Night MCLR rate coming down to 8.00% from 8.90% and Home Loan rate from 9.00% to 8.50% itself shows demonetisation effect was positive on Home Loan rate. But, did you miss something, I am sure you have missed it.

MCLR had reduced from : 8.90% to 8.00%  :  reduced by 0.90%

Where as Home Loan rate has reduced by only 0.50% (9.00% – 8.50%) where did the remaining 0.40% go.

Who is taking that extra 0.40% , when its not passed on to the new home loan rate ?

What most of the banks have done is they have increased there margins from 0.10% to 0.60%.

Now let me go into more details about, was demonetisation a benefit or loss to new Home Loan Seekers and existing customers.

Demonetisation effect on Home Loans

Let me explain in detail,  Before I tell you, why customer who had taken home loan in Dec-2016 is better rate then post demonetisation. First I would recommend how MCLR is calculated  to understand why MCLR had reduced due to demonetisation and now I would like to explain, how the home interest rate is set by banks.

Interest rate consist of 2 components.

Interest Rate = 1-Year MCLR  Rate + Margin Rate

Recent announcement was :  1-year MCLR Rate : 8.00 %

Margin Rate  was : 0.60 %

So effectively the Interest rate was set to  8.60 %  = 8.00 % + 0.60 %

Prior demonetisation was 9.00% = 8.90%(1-year MCLR) + 0.10% (Margin Rate)

What is 1-year MCLR ?

When we avail a loan with 1-year MCLR,  it’s 1-year Fixed loan. Which means any changes in  MCLR during that 12 months, your home loan will not be affected. For example if you availed home loan in Dec-2016 your interest rate change will be only in Dec-2017. So any change , decrease of MCLR or increase of MCLR, your home loan rate will not change during this 12 months. In Dec-2017 your home loan rate will get updated based on the 1-year MCLR during Dec-2017. Again next change will be next year Dec-2018 and this would continue till closure.

What is the Margin Rate ?

Margin Rate is what Banks take as the operational costs. It gets fixed when you have taken.  For example if you had availed home loan in Dec-2017 your home loan should have been 9.00% (8.90 + 0.10) your margin should be only 0.10 %. So your Interest rate would be 1-year MCLR + 0.10% for ever.

Now let’s compare your home loan with the new rates

Year 1-Year MCLR Customer who had taken in Dec-2016 time frame. Customer who had taken in Jan-2017 time frame.
Dec-2016 8.90 % 9.00 % (8.90+0.10)
Jan-2017 8.00 % 8.60 % (8.00+0.60)
Jan-2018 If 7.50 % in Dec & Jan 7.60 %(7.50 + 0.10) 8.30 %(7.70 +0.60)
Jan-2019 If 8.60 % in Dec & Jan 8.70% (8.60 + 0.20) 9.05% (8.60 + 0.45)
Sep-2019 If 9.25 % in Sep & Jan 9.35 %(9.25 + 0.10) 9.85%(9.25 + 0.60)

It would continue till the closure of the loan.  What we are seeing right now is, Short term profit and long term loss. People who convert to new rate without the long calculation they would start to pay every year 0.50% more than December rate.

1-year-MCLR had decreased drastically only due to demonetisation. Hopefully we need not stand in long Queues every year. Mostly its once in lifetime event.

Instead of banks making profits due to demonetisation drive they should have passed on the benefits to the end customers.

Hope to see cut in the Margins in coming days. Happy home Loans.

This complex calculations and to understand what is long term profit & short term loss Vs short term profit with long term loss . Which one is better, to be left to the professionals. http://loanyantra.com is best at this. We will wait for the margins to come down, then we would recommend the right change that would ensure you save the most on your home loans…

Happy Home Loaning…

Team

Loanyantra.com

Loanyantra, wishes you a happy beginning and a victorious year ahead. Happy 2017.

newyearloanyantra

Of all the considerable events this year (2016) , one in particular will remain forever in our memories. Attaining the best of customer satisfaction under every possible condition.

Thank you team and thank you dear customers. You are behind Loanyantra’s successful one year journey. You all helped us move up in the ladder.

We feel proud to revive our success and failure which made the year. Placing in T-HUB, exposure to successful dignitaries, association with multiple lenders, conducting various events, knowing varied customers, attending them with customised service, everything put together was 2016, for us.

loanyantra-2016

We promise ourselves for a better growth and we promise you for a more desirable and effective service.

Wish you a happy beginning and a victorious year ahead. Happy 2017.

Vijay and Harsha.