HDFC Bank revises charges, fees structure on personal loans with effect from this date

HDFC Bank has revised charges and fees structure on unsecured loans like personal loans with effect from April 24, 2023, according to the bank website. It has also sent messages to its customers stating the same.

Here are the important changes in fee and charges on person loan.

Also read: 6 personal loan charges you should know

Prepayment charges/ Premature closure charges

Prepayment Charge (for full payment) :	Premature closure charges (for full payment) :
Term Loan	Term Loan
0-12 Months – Not Allowed	• Up-to 24 EMI repayment – 4% of principal outstanding,
13-24 months – 4% of principal outstanding	• Post 24 EMI and up to 36 EMI repayment – 3% of principal outstanding,
25-36 months – 3% of principal outstanding,	• Post 36 EMI repayment – 2% of principal outstanding.
>36 months – 2% of principal outstanding	Premature closure charge would be applicable on the principal outstanding amount of the loan. GST and other Govt Taxes and Levies as applicable from time to time, would be charged additionally.
GST and other Govt Taxes and Levies as applicable from time to time, would be charged additionally.

Part Prepayment Charge (for partial payment)/ Premature closure charges

Part Prepayment Charge (for partial payment) :	Premature closure charges (for partial payment) :
Term Loan	Term Loan
0-12 Months – Not Allowed	Partial Premature closure charges applicable on part payment amount. Partial premature payment is allowed up to 25% of Principal Outstanding, only once in the financial year and twice during the loan tenure.
13-24 months – 4% of part payment amount,	Partial premature payment is allowed post payment of first EMI.
25-36 months – 3% of part payment amount,,	• Post 01 EMI and up to 24 EMI repayment – 4% of part payment amount.
>36 months – 2% of part payment amount.	• Post 24 EMI and up to 36 EMI repayment – 3% of part payment amount.
	• Post 36 EMI repayment- 2% of part payment amount.
Part-payment allowed after 12 EMIs , up to 25% of Principal Outstanding. It is allowed only once in the financial year and twice during the loan tenure.	GST and other Govt Taxes and Levies as applicable from time to time, would be charged additionally.
GST and other Govt Taxes and Levies as applicable from time to time, would be charged additionally.

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Delayed instalment payment charge- For term loans, an overdue instalment amount plus any relevant GST or government taxes will be levied a delayed instalment payment fee of 18% per annum.What is a personal loan
Many individuals avail personal loan when they are in need of money instantly as personal loan is a loan that is provided with little or no documentation and without the need for security or collateral. The money from this loan can be put to any financial use.

How personal loan work
You apply for a loan, the bank verifies your creditworthiness, and then extends an offer to you. The money is deposited to your bank account when you accept it, where you can use it however you like.

Interest rates on personal loans
Interest rates might vary depending on factors including tenure, income, occupation, credit score and others. The rates are not fluctuating; they are fixed.
What is a reducing Personal Loan Interest Rate?
Every month, the interest rate on the outstanding loan balance is determined using the reducing personal loan interest rate method. The interest owed on the entire loan amount is included in the EMI in this case.

Example according HDFC Bank website: If an individual has opted for a personal loan of Rs.5 lakhs for 5 years on a 16% diminishing interest rate, then they would have spent Rs.2,29,542 towards total interest. Going by this calculation, the –