You take a personal loan of Rs 2 lacs from a bank. Interest rate is 10% p.a. What is the cost of the loan? 10% p.a., right? Isn’t interest rate the cost of loan? Yes, but only if the bank levies no other charges. If the bank does levy additional charges, then the cost of… Continue Reading
You are taking a home loan. You are worried, who will repay the loan if you were not around? The lenders (the banks and NBFCs) are bothered about this too. And this is a genuine problem for every stakeholder. You, your family, and the lender. How will the loan be repaid if the borrower passes… Continue Reading
The Reserve Bank has recently increased the risk weights on personal loans and credit card receivables. Many questions would have popped up in your mind. What are risk-weights? And how do these risk-weights affect the cost of your loans? In this post, let’s find out. Can the Banks Lend Whatever They Want? We know that… Continue Reading
Credit scores are becoming more and more important. Your credit score reflects your credit worthiness. A good credit score can not only improve the odds of approval of your loan application but can also lower your loan interest rate. Not just that, but a good credit score can be helpful in other aspects of life… Continue Reading
Have repaid your home loan but are struggling to get back the documents from the bank? I have never taken a secured loan but have read that the banks are not so friendly in returning the documents to the borrowers after full repayment of the loan. No matter how much you may want the original… 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
Starting October 1, 2023, you may be able to port your credit Card just like your mobile number. No, you won’t be able to port your ICICI Bank Credit Card to HDFC Bank or vice versa. But you can choose the card network for your credit card. What Are Card Networks? If you look at… Continue Reading
ICICI Bank has launched an EMI facility for UPI payments under its ICICI PayLater product. With this, you can scan a UPI QR code from the UPI app and purchase using an instant EMI facility. So, you purchase an item worth Rs 15,000 and instantly convert this into 3 EMIs of say Rs 5,200 each.… Continue Reading
With loans, the compounding works in the reverse. If you miss an EMI installment, the overdue amount (which includes the principal) gets added to the principal. And you must pay interest on the overdue interest too. Interest on interest. Sounds like compounding, doesn’t it? Just that it is now working against you. After you default… Continue Reading