An interest rate hike hurts all borrowers. For the same service (loan), you must pay more every month. Or pay the same amount but for a longer period. Neither is a desirable outcome for a borrower. And yes, the rate hikes hurt the borrower running a tight budget a bit more. In such cases, the… Continue Reading
RBI has come out with additional guidelines on digital lending. This is much needed. All of us have read news of unsuspecting borrowers being threatened for loan repayment. All kinds of methods were used to embarrass and harass borrowers. A few borrowers even ended their lives in the face of this continuous intimidation. Access to… Continue Reading
You open a bank fixed deposit of Rs 5 lacs for 2 years at 7% p.a. After a couple of months, you need Rs 2 lacs to meet a planned expense. To meet the expense, you take out an overdraft facility against the FD of Rs 5 lacs. The interest rate on the overdraft facility… Continue Reading
The loan amount is already decided. You do not control the interest rate. The only aspects where you have discretion are: Loan Tenure Pre-EMI or Full EMI Regular home loan scheme OR Home-saver loans (such as SBI Maxgain) #1 Choosing the Loan Tenure We have this tendency to close the home loans as soon as… Continue Reading
While checking out from your favorite shopping app, you could get one of the following payment options on your credit/debit card or Buy Now, Pay Later (BNPL). Full payment (no cashbacks or discount) Interest-based EMI (without cashback or discount) No-cost EMI Upfront discount Cashback Upfront discount/cashback and interest-based EMI Upfront discount/cashback and no-cost EMI Over… Continue Reading
It is common for Non-resident Indians (NRIs) to borrow in their country of residence to invest in India. They borrow to pay off loans in India, purchase real estate or even invest in stocks or mutual funds. Why do it? The borrowing rates may be lower in their country of residence. Say, you can borrow… Continue Reading
RBI has once again extended the deadline of tokenization of credit cards from June 30 to September 30, 2022. The central bank has extended the deadline multiple times now. Tokenization of cards helps make your credit and debit card transactions more secure. But what is the need? It is common for us to store your… Continue Reading
If you use BNPL (Buy Now, Pay Later) service or cards from Slice or Uni Pay, this development will interest you. BNPL has emerged as a competitor to credit cards. Easy onboarding. Seamless and convenient process. Easy repayment terms. Instant credit. Who needs a credit card? However, RBI, in its latest notification to non-bank PPI… Continue Reading
While digital lending apps are all the rage, I am a bit paranoid even about downloading and browsing through such apps. I worry about the Machiavellian design of their user interface and that I may be fooled into taking a loan I didn’t want. And while it may sound surprising, this can happen. Recently, I… Continue Reading
In the monetary policy announcement on June 8, 2022, the Reserve Bank hiked the repo rate by 0.5%. Bad news for borrowers. The interest on floating rate home loans would soon go up. Either the EMI or the loan tenure will go unless you part prepay your loan. Apart from the rate hike, the Reserve… Continue Reading