Every home loan borrower wants to close the home loan quickly. After all, you truly own your house once you have repaid the entire home loan. How Does the Home Loan Amount Go Down? We know how loan mathematics works. Most home loans are reducing balance loans. With reducing balance loans, a portion of EMI… Continue Reading
The simplest way to assess the affordability of the loan is to look at the EMI. Lower the EMI, the more affordable the loan is. Because that’s the hard cash you must pay every month. The EMI depends on the loan amount, the loan tenure, and the interest rate. And you can tweak around these… Continue Reading
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
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
A few weeks back, I wrote about the impact of RBI repo rate hikes on your home loans EMIs. RBI Repo rate hikes will quickly translate to longer loan tenures or higher EMIs for the borrowers, especially if your loan is linked to an external benchmark. If there is scope to increase the loan tenure… Continue Reading
The Reserve Bank has hiked the Repo rate in the first week of May 2022. If your home loan is linked to Repo rate or to any external benchmark, you will soon see one of the following things happen. EMI stays constant and the outstanding loan tenure goes up (that is the usually the default… Continue Reading
Amit (name changed) approached HDFC for a home loan. The lender sanctioned the home loan and cross-sold a home insurance policy (HDFC Home Suraksha Plus). The home loan amount is Rs 29 lacs, and the single insurance premium is ~95,000. The premium for the insurance plan is quite high. Amit can’t pay such a high… Continue Reading
It is not easy to get a home loan. You must have the right job/profession, age, income, and creditworthiness to get a home loan. Many times, the lender is willing to offer you the loan but not the quantum you desire. And don’t pin the blame on lenders. The lenders have a reason to adhere… Continue Reading
Who does not want to prepay a home loan early? By prepaying your home loan, you take a big liability off your back. This also ensures emotional and financial security for the family. The problem is that, for most middle-class families, the home loan amount is a multiple of their annual incomes. And you would… Continue Reading
Standard Chartered Bank recently introduced an interest-only home loan product. Well, no loan gets repaid if you just keep paying the interest. Therefore, in this product, you do not need to repay any principal for a few years. The regular EMI starts on the completion of principal moratorium period. In this post, let us discuss… Continue Reading