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
You’re looking to buy a car using a bank loan. You already have an existing home loan with your bank that you have been aggressively prepaying over the years. Your bank app tempts you with a customized top-up loan offer with instant approval and 24-hour disbursal. Should you use it to finance your car purchase?… Continue Reading
Our brains are not wired to perform very complex calculations without assistance. Either we need pen and paper to solve. Or a calculator or spreadsheet software to solve complex problems. Now, if you really want, it is not difficult to find a pen and paper. And mobile phones provide 24X7 access to calculators and spreadsheet… Continue Reading
Struggling with credit card debt? You make small payments on your credit card every month, but the debt just does not seem to go down. Why Does This Happen? Because credit cards are the most expensive debt in the formal finance sector. The interest rate ranges from 36% to 45% p.a. While you may be… Continue Reading
Home loans are long tenure loans. 15-30 years. And even a difference of a few basis points can make a huge difference to your overall nominal outgo. Assuming the interest rates stay constant, here is the difference between the cash outgo to repay a Rs 50 lacs home loan in 20 years. Interest Rate 7.50%… Continue Reading
The Reserve Bank has come out with two separate circulars in the middle of August 2023. First about levy of penal interest and the second about the reset of interest rate in retail floating rate loans. We discussed both these topics when the RBI broached these topics for the first time. Coming Soon: EMI Defaults… Continue Reading
You take a Rs 50 lacs home loan for 15 years at 8% p.a. The EMI for the loan shall be Rs 47,782. Interest rates keep changing. When the interest rate rises, the default bank action is to keep the EMI constant and increase the loan tenure. Let’s say the interest rate for your loan… Continue Reading
That’s how it should be, right? Longer home loan tenure means you want a longer period to repay the home loan. And that can happen only if you repay the loan slowly. Still, when I wrote about a 40-year home loan product a few weeks back and discussed how you would have paid only ~15%… Continue Reading
Bajaj Housing Finance has extended the tenure of its home loan products for new borrowers up to a maximum of 40 years. We are not used to seeing home loans of 40-year tenure. Before this, the maximum I had heard was 30 years. So, that’s a sharp jump. I don’t want to go into specifics… Continue Reading
RBI has increased repo rate from 4% p.a. to 6.5% p.a. since May 2023. If your home loan is benchmarked to RBI Repo rate, that means a hike of 2.5% in your home loan interest rate. Impact of Interest Rate Hike on Your Loan Tenure Usually, the default option in case of interest rate hike… Continue Reading