This home loan variant may go by any nomenclature, but the concept remains the same. You take a home loan. You have an “Excess Account” where you can keep your excess funds. You can also call it “Overdraft Account.” In the next month, interest is calculated only on the (Home loan outstanding – Balance in… Continue Reading
A friend was planning to take a home loan of Rs 75 lacs. With an EMI of Rs 66,278 for 20 years. Over the 20 years, the total of all payments will be Rs 1.59 crores. So far, so good. Now an interesting twist. He calculated the cost of this home loan as 3.83% p.a.… Continue Reading
Almost everyone wants to close their home loan soon. A home loan is a big liability and getting this burden off the head is important for most households. Of course, there is only one way to close the home loan soon: Pay more than the EMI. There is no other way. Yes, a reduction in… Continue Reading
Recently, I came across a viral content on social media where the author referred to home loans as a scam. Why? The author took a loan of Rs 48 lacs. EMI of Rs 42K. After paying 15 EMIs, the author had repaid only Rs 75,000 in principal and Rs 4.8 lacs in interest. And it… Continue Reading
You need to pay your daughter’s college fee of Rs 15 lacs in the coming month. You are wary of visiting the bank branch multiple times for getting an education loan sanctioned. You took a home loan 5 years back. You get a call from your bank that you are eligible for a top-up home… Continue Reading
RBI released a very important circular on April 15, 2024 about Key Facts Statement (KFS) for loans and advances. The circular aims to enhance transparency in the loan costs and charges for the retail borrowers. Usually, the loan agreements have all the information about various costs and charges, but loan agreements are lengthy documents, and… Continue Reading
Buying life insurance to cover your home loan is a good idea. For both borrowers and the banks. I recently came across a home loan product from Bank of Baroda, where the bank charges you a higher rate of interest if you don’t purchase a loan (credit) insurance product from the bank. This is a… Continue Reading
A common answer is 35-40% of the net take home salary. If you search on the internet, you will get an answer in a similar range. The banks may also have internal guidelines where they may not let your loan EMIs exceed a certain percentage of your net salary. When it comes to financial planning,… Continue Reading
A good credit score is important. It can provide you with access to a wider range of credit facilities and help reduce the cost of credit. Going forward, your credit score may play an important role in non-financial matters, say employment or taking a house on rent. Fair enough but what are the factors that… Continue Reading
I have not found too many people who are not in a rush to close their home loans. For some, the obsession is so high that they put everything else, even long-term investments, on the back burner while they focus on closing their home loans. Do you belong to the same group? Nothing wrong in… Continue Reading