[IDFC Bank] Home loan calculator and actual EMI mismatching

[CC-Muncher]

I have a IDFC home loan with an 8.75% interest rate (monthly reducing rate) offered with an EMI of Rs 27,876 for a loan of 32 Lakh of which the balance amount is Rs. 28.64 Lakh and tenure 191 months left out of a total of 213 months. (I am having a healthy cibil > 800 for quite long)

If I use the IDFC home loan calculator or any other I see EMI to be less than what is charged. On checking with the Nodal officer (Grievance Redressal Team) the reply I got was -
"The operations team has calculated it and the system has generated this EMI."

They don't have any answer for what different calculations they are doing to arrive at increased EMI. On telling them If I complained to the RBI Ombudsman about not being able to provide info about the difference in EMI calculation, the executive said he couldn't comment on that and asked me to do whatever felt right.

Is anyone else in the same boat? how to go about it and get the same EMI as shown in all the calculators?

 

[CC-Muncher]

I did calculate that: (ignore 3rd point)

To correct the amortization I reached out for restructuring and the EMI quoted by bank turned out to be more.
isn't that abnormal?

 

[aayusharyan]

To correct the amortization I reached out for restructuring and the EMI quoted by bank turned out to be more.
isn't that abnormal?

Bank might be charging a different ROI. When you request for restructuring, they re calculate fresh ROI based on your credit Profile, which might be higher in this case it seems. 8.75 was the old ROI. Ask them that for which ROI they are calculating.

 

[CC-Muncher]

Bank might be charging a different ROI. When you request for restructuring, they re calculate fresh ROI based on your credit Profile, which might be higher in this case it seems.

Nope, they confirmed that they are charging the same ROI, same outstanding principal.
And denied the reason to tell the reason for deviation

 

[aayusharyan]

Nope, they confirmed that they are charging the same ROI, same outstanding principal.
And denied the reason to tell the reason for deviation

Ask for the breakdown document of the EMIs. Then we can have better idea.

 

[CC-Muncher]

Ask for the breakdown document of the EMIs. Then we can have better idea.

That won't help as the extra amount that I end up paying will be added to the interest column.
Also, they can just give quotes and not the month-wise breakdown.

With no reason in sight for charging high EMI, I feel the only option left is to raise this with the honourable RBI ombudsman and get the real EMI as per the calculators.

 

[aayusharyan]

That won't help as the extra amount that I end up paying will be added to the interest column.
Also, they can just give quotes and not the month-wise breakdown.

With no reason in sight for charging high EMI, I feel the only option left is to raise this with the honourable RBI ombudsman and get the real EMI as per the calculators.

Home Loan is pretty serious things and I think Banks usually don't do shady stuff in the Calculation. I seriously think there is a misunderstanding between the values for which you are calculating and for which the bank is calculating.

Also, did you ask for the restructuring charges. How much is that? Are they also adding that to the principal outstanding?

 

[CC-Muncher]

Home Loan is pretty serious things and I think Banks usually don't do shady stuff in the Calculation. I seriously think there is a misunderstanding between the values for which you are calculating and for which the bank is calculating.

Also, did you ask for the restructuring charges. How much is that? Are they also adding that to the principal outstanding?

it's about 5-7k.
No, they are not adding it to the outstanding principal.

 

[aayusharyan]

it's about 5-7k.
No, they are not adding it to the outstanding principal.

Then we need to get the breakdown. Try OB if the Bank is not helping. I am not sure but IDFC has PNO as well, try escalating to them first.

 

[CC-Muncher]

Then we need to get the breakdown. Try OB if the Bank is not helping. I am not sure but IDFC has PNO as well, try escalating to them first.

I asked the Nodal officer about raising it with PNO and he mentioned PNO will revert with the same answer.

 

[aayusharyan]

I asked the Nodal officer about raising it with PNO and he mentioned PNO will revert with the same answer.

You still raise it to PNO. We will see what they answer.

 

[CC-Muncher]

You still raise it to PNO. We will see what they answer.

Thanks a lot @aayusharyan for the help.
I'll raise it with the PNO and update!

 

[pradeepG]

apart from interest charged in your EMI, a GST of 18% is also charged on Interest Component, i wonder if EMI Calculators consider GST while calculating. (tricky malpractices to convince you to take loan by looking at your EMI amount and thinking i can easily afford this).

 

[aayusharyan]

apart from interest charged in your EMI, a GST of 18% is also charged on Interest Component, i wonder if EMI Calculators consider GST while calculating. (tricky malpractices to convince you to take loan by looking at your EMI amount and thinking i can easily afford this).

I think in home loan computation. The EMI amount is the amount which will deduct from bank account. I am not sure about the GST component (that I have heard only in context of those No cost EMIs, the malpractice you are talking about). Not with respect to home loan. That Rate of interest usually includes those overhead costs already.

 

[pradeepG]

I think in home loan computation. The EMI amount is the amount which will deduct from bank account. I am not sure about the GST component (that I have heard only in context of those No cost EMIs). Not with respect to home loan. That Rate of interest usually includes those overhead costs already.

every EMI you pay anywhere is a service provided by bank and hence is charged GST upon it. Go ahead confirm it from you bank. or if you have sheet of bifurcation of principal & Interest Components of every EMI, calculate 18% GST on interest component and then add it and then compare it with actual EMI charged.

 

[aayusharyan]

every EMI you pay anywhere is a service provided by bank and hence is charged GST upon it. Go ahead confirm it from you bank. or if you have sheet of bifurcation of principal & Interest Components of every EMI calculate 18% GST of interest component and then add it and then compare it with actual EMI charged.

When the bank gives me the EMI amount, that already includes the GST. And so the calculators also do that... That's part of the rate of interest. Which bank do you have your HL with?

I have first hand experience of Allahabad Bank, Punjab National Bank and Godrej Housing Finance Limited NBFC.

 

[pradeepG]

When the bank gives me the EMI amount, that already includes the GST. And so the calculators also do that... That's part of the rate of interest. Which bank do you have your HL with?

I have first hand experience of Allahabad Bank, Punjab National Bank and Godrej Housing Finance Limited NBFC.

i dnt have any home loan, but have general idea how GST remains a hidden component in every loan interests.

 

[aayusharyan]

i dnt have any home loan, but have general idea how GST remains a hidden component in every loan interests.

I understand where you are coming from. Usually that's the case in EMIs on consumer loans taken on Credit cards. Stuff like No Cost EMI. They have the EMI amount and interest component which is separate but when added makes up for total expected EMI amount. (That too there is a reason why No Cost EMI do discount approach because RBI mandates, there can be no loan with 0% interest)

However, in other loans like PL, HL, etc. The rate of interest is already inclusive of GST component. So things are much more simple for consumers. Just, interest component and principal component.

 

[sumitlehri]

I understand where you are coming from. Usually that's the case in EMIs on consumer loans taken on Credit cards. Stuff like No Cost EMI. They have the EMI amount and interest component which is separate but when added makes up for total expected EMI amount. (That too there is a reason why No Cost EMI do discount approach because RBI mandates, there can be no loan with 0% interest)

However, in other loans like PL, HL, etc. The rate of interest is already inclusive of GST component. So things are much more simple for consumers. Just, interest component and principal component.

I am not at all into home loans.Just wanted to ask basic thing..If i purchase any flat ,can i take loan against flat and pay the emi..Is home loan given on your salary capacity or the asset you have purchased? Like if a person receives huge rent or interest but unemployed..can he take home loan against the property he has purchased.

 

[aayusharyan]

I am not at all into home loans.Just wanted to ask basic thing..If i purchase any flat ,can i take loan against flat and pay the emi..Is home loan given on your salary capacity or the asset you have purchased? Like if a person receives huge rent or interest but unemployed..can he take home loan against the property he has purchased.

They do consider rental income, as long as it is documented. That is, as long as it shows in your ITR. They won't just take your word for it. But if you can prove it. They will consider as your income. And provide loan on that. Usually what they worry is that loan EMI should not be more than 30% of your income. Inclusive of other loans, so if you have a personal loan worth 5% of your monthly income as EMI. Then HL can only be upto 25%... Like that.

 

[aayusharyan]

I am not at all into home loans.Just wanted to ask basic thing..If i purchase any flat ,can i take loan against flat and pay the emi..Is home loan given on your salary capacity or the asset you have purchased? Like if a person receives huge rent or interest but unemployed..can he take home loan against the property he has purchased.

Since HL is a secured loan against the property you are buying. The loan amount is of the property amount as checked by the bankers... However you can get some sort of combo loan where they will pay you money to construct your house as well (incl interior sometimes)... That additional part is kind of unsecured as it can be over the limit. So, if you have additional properties it can be helpful. If not also no problem as long as amounts are reasonable