What is step up home loan?

I came across your query regarding what is a step up EMI home loan. So, I thought I should help you out. You can understand the Step loan EMI as an option for loan repayment where the EMI is lower in the beginning years and rises gradually with time. I’ll explain this in detail, so you can make sense of things easily. I took a step-up loan myself, and hence, I am aware of the details related to this loan type.

What is Step Up EMI in Housing Loan?

Continuing from above, the concept of step-up EMI loans is offered to match the growing income of the borrower. The main aim is to help the borrower with better financial management as they only need to pay the interest in the initial years. With time, they then need to pay the principal part in greater amounts. The gradual increase in this rate is decided during the time of approving the home loan. The rate is set in a way that aligns with the growth in income of the individual.

I would say that this loan type suits anyone who is looking forward to buying their own house, but needs assistance with financial management, as a gradual increase in EMI helps them plan their expenses better.

This is all I have to share with you. I hope this helps.

All of us dream of “roti,kapda and makan”. To fulfil your dream of having a home, individuals can get a loan from a bank and financial institutions. If you are a young professional or individual in the early stages of your career, you should know ‘what is step up home loan’.

In simple words, it is a type of loan that allows borrowers to start with smaller monthly payments and gradually increase their payments over time. The step up repayment facility means that the borrower can start with a lower EMI (Equated Monthly Instalment) amount and increase it every year or every few years as their income increases. Borrowers can manage their finances more effectively and make higher payments when they can afford to do so.

Usually,

lenders calculate the home loan amount based on a lower EMI for the initial years. This lower EMI helps to increase your capacity to borrow and hence you can avail of a larger loan amount.

The EMI contribution of the borrower in the first few years of repayment will be lower under step up loan. This  will help the borrower in managing your cash flows efficiently without bearing a financial burden. 

Under step up loan type, the payment of principal is deferred. Borrowers can avail of tax benefits on the interest amount optimally during the repayment period. 

Since I have an account in HDFC bank, I will tell you how to avail  HDFC step up repayment facility in home loan. Just follow the steps:

1. Visit the HDFC website and log in to your account.

2. Go to the "Loan" section and select "Change in Repayment Instructions."

3. Select "Step Up Repayment Facility" as your repayment option 

4. Submit the request online, and HDFC will review and process your request.

This is all from my end on what is step up home loan’.

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