Home Loan

POSTED BY Sachin ON March 2, 2011 2:53 pm COMMENTS (2)

Hi Manish:

I had taken a housing loan from HDFC for 7 lacs @ 8.25% in 2006 for 180 months with an EMI of 6694 per month for a 20 year old property. I have got a letter from HDFC stating my home loan tenure has gone beyond normal tenure. Following are the reasons sighted in the letter.

HDFC’s RPLR has been revised with effect from December 01, 2010 to 15.00%. The interest rate for your loan at present is  12.00% effective from 01-JAN-11.

I have been asked to alter the EMI or make part payment of principal. However, i’m currently not in a position to alter the EMI as my mutual fund SIP’s will get affected nor I can make part payment of the principal as i have not accumulated enough cash.



I need some guidance on the above. Would also like to know if the current home loan interest rates are between 9 to 9.75% how is that i’m being charged at 12.00%.

I also intend to sell this house sooner so that i can use the funds from this house to settle the loan and invest in a new house.

2 replies on this article “Home Loan”

  1. ashal jauhari says:

    Dear Sachin, Stop some of your SIP & increase your EMI amount immediately. This ‘ll help you to protect your default as 12% interest rate indicates that all the amount of your EMI is only servicing interest part & no money is going to principal repmt.

    In case you are in position to book some tax free gains from your MF investment, you should use it for partial repayment immediately.



  2. Atul says:

    Hi Sachin,

    1.The actual interest rate will be lower than RPLR. In your case its 3% less.
    2. I suggest stop SIP and make part payment since 12% interest rate is higher in current scenario
    3. Liquidate some of your MF units (if you have made substantial profit) and make part payment.
    3. Talk to Bank Manager and explain your current situation. May be they will extend the tenure.



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