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
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
A car is an expensive purchase, and many families take a car loan to purchase the car. In this post, I discuss aspects that you must keep in mind while taking a car loan. #1 Processing Fee Car loans are short to medium term loans. Usually, 3 to 5 years. Hence, the impact of processing… 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
Given the loan amount, interest rate and home loan tenure, how many of us can calculate the quantum of EMI? I bet not many can. And most of those who can require spreadsheet software to calculate. We have written about how reducing balance home loans work. The post explains about the workings of EMI calculations.… Continue Reading
I came across an interesting case in a business daily a few weeks back. A consumer forum bench directed ICICI Bank to pay Rs 55,000 to a borrower. Here is how this happened. The borrower signed up for a home loan of Rs 30 lacs for 10 years from ICICI Bank in 2006. The loan… Continue Reading
If you are moving to one of the bigger cities such as Mumbai and Bengaluru, finding a cheap accommodation is not easy. Rentals can be quite high too. However, as a tenant, paying high rent is not the only problem. You need to put up a big security deposit with the landlord/owner too. In Mumbai,… Continue Reading
When we are looking for home loans, we tend to go with the loan product that charges the lowest rate of interest. What if the bank were to charge you a negative interest rate? Essentially, the bank pays you to take a loan from them. Not possible? Well, a Danish Bank has just done that.… Continue Reading