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Home loan term keeps resetting to original term


Home loan term keeps resetting to original term

Last updated: November 17 2019
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  • Home loan term keeps resetting to original term

    Dear Members,

    I have taken a home loan from HDFC Ltd for an under construction flat. As per the agreement loan is disbursed according to the current stage of construction. Loan repayment term is set to 300 months. So far HDFC has disbursed around 93% of sanctioned amount in 4 different disbursements.

    After each disbursement HDFC resets the loan term to the original and increases EMI. For example, before the 4th disbursement remaining loan term was 288 months but after 4th disbursement it went back to 300 months again and EMI also increased. Because of this resetting of loan term I will end up paying extra interest over the course of loan repayment term.

    My understanding is whenever there is any new disbursement outstanding principal should increase without changing the remaining loan term. In this way increase EMI will slightly higher but for lesser term resulting in lesser interest payment.

    I have sent several emails and sent queries through HDFC website but have not received any response so far.

    Would highly appreciate if you guys can help me with following queries

    1. Has some else also faced similar scenario?

    2. Is this normal process for disbursement of under construction proerty?

    3. What could be done to avoid/correct this?

    Loan Details

    Original Loan Term - 300

    Number of Disbursements - 4

    Property - Under Construction

    Lender - HDFC Ltd


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