EMI this is one abbrev i am scared of and more specifically when it is your home loan. First the bank reps will coax you into getting a floating ROI and then it will be too late till you realize that you cannot float anymore. Started with 11K as an EMI and as per the latest news will be paying 14K and all this in a years span. Worst part of the calc, a 14 lac loan will fetch the bank a wopping 26 lac interest by the end of 20 yr err sorry 23 yrs, the tenure has been increased with the rise in the ROI. Can the govt intervene and stop this loot lo attitude of HFC. GOD SAVE ME.
RE:loot lo HFC
by Rakish Poulose on May 02, 2007 12:26 AM Permalink
The interest rates will not remain the same for the next 23 years, have patience and relax.
TheGodAlmighty had made the interest unlawful for the human being and the society. All the interst benifit only to the rich man and countries and harm to the poor people. So we shoud abide by the law of Almighty who is one and only one for all the human and try to avoid EMI or any such interest involved debut. May God show us the right path,
RE:RE:Interest is harmful to the socity
by Ram Avatar singh on Apr 30, 2007 07:59 PM Permalink
Yes it is only , Govt wrong policy, how some one can say , this is the democracy , it is cheating like olden day poor people and the Jamidar`s creminology, yes we r human being if we belive God we should appose such Govt olicies, yes corupt people started with corruttion/privattisation and killing all democretic policies, once if interest ret made so low it should not be increase interest over the loan,more then .5 or1%, this can increase for the new loans such that people can calculat and they go for their loan, now already eployed people who have calculated their loan as per their incom, they can pay more which may by out of limit of their income, RAS
It is a huge exploitation of average middle class man is what I wud say of the current home loan scenario.
1. In the name of tax benefit huge amounts of your EMI goes into interest calculated for the tenure. Which means if you are repaying your loan much much earlier, you loose all that additional interest paid per month till the early repayment of loan.(Your interest amount is not equally spread within ur repayment tenure) 2. On top of it you also pay an early payment charge which could range from 2% to 5% of amount paid depending on the loan schemes which is absolute exploitation of the middle class community. 3.Over and above all this increasing inflation and interest rates in the name of floating rate schemes luring more and more common men and families to this drive.
What more can we ask for? Come fall in love with the Indian home loans
I have taken Standard Chartered Bank's 'Home Saver' loan plan.
In this plan, the amount that you have in their account will be deducted from the total loan amount before calculating interest on a daily basis.
For example, let's say, you have taken 10 lakhs loan, and you have 1 lakh in their account, while the interest is calculated on a daily basis, only 9 lakh will be considered for calculation of interest.
This reduces the amount you pay as interest in the EMI, reduces the loan tenure and also reduces the amount you pay as interest.
This is helpful for people who have liquid cash in hand which need not be used for anything else at this point of time.
Note that you can withdraw the amount that you have with their account at any point of time, so it's liquid.
This is equivalent to putting your money in a 10% interest earning savings account, while you save on interest too.
RE:Try Home Saver kind of loan account
by TS on Apr 30, 2007 03:20 PM Permalink
I have done the same thing. You are earning intertest @ 11% or whatever the rate of home loan. In a FD, you would have earned only 7%, out of which, one third would have gone as tax.
RE:Try Home Saver kind of loan account
by Dhoom on May 01, 2007 03:39 PM Permalink
Its a good option, but not sure this option is available in all banks, anyway thanks for information. I'll talk to my bank
RE:Try Home Saver kind of loan account
by Nand Gupta on May 05, 2007 05:07 PM Permalink
As per my knowledge lots of banks offer this kind of schema. HSBC, SCB, ICICI to name a few. However, you should keep in mind that the interest rate of such schemes will be higher than the normal ones. They differ from 1% to 2%.
RE:RE:Try Home Saver kind of loan account
by THANGAVELU on Apr 30, 2007 03:15 PM Permalink
But, we have no idea for the SCB duration increase during interest upward revisions. They are not informing these details to customers. rgs Velu
RE:Try Home Saver kind of loan account
by SNEHALATHA KRISHNA SHETTY on May 06, 2007 03:17 PM Permalink
You say that these banks and their such schemes are helpful, "Quote your example"... If i had taken a loan say from this bank for 10,00,000 and i keep 1 lac in their scheme, and i will be charged interest on 9 lac... Why wouldn't i pay up the bank the 1 lac i have, its like the bank loans me 10 lac and i keep 10 lac i have with the bank and the bank dose not charge me interest (only principal as EMI each month)Dose this solve any purpose these are smart banks (take from you and lend you back)I'd prefer instead pay up the 10 lac as income towards the new house, The EMI'S can be put up as savings. The biggest catch is the amount is liquid, no moment you withdraw you will be penilised and the interest charged will be current and at the discrete of the bank.
I have taken a loan of 1230000/- on 7.25 % Rate of Interest. Till now my EMI has not been increased. But people are telling nothing is called Fixed Rate ,Bank can increase the rate any time without giving any reason.Every three years the Fixed rate of interest is revised. Can you tell me the truth ? What should i do now to take care before hand ? Many Thanks for your reply
RE:What about fixed Rate of Interest ?
by annu chandra on May 01, 2007 12:28 PM Permalink
home is fixed for 3 years and by paying penalty of .5 % it can be extended from 3 to 5 years.
every 3 years their is revision of interest rates, now interest rate is at its peak, but it will come down by 1 % by next 6 months.
RE:What about fixed Rate of Interest ?
by Salil Kumar on Apr 30, 2007 03:14 PM Permalink
I had paid a 2% penalty and shifted to fixed rate 2 years back, at 7.25%.. Turned out, it was the smartest financial decision I took in a decade.If the bank wants to increase the rate, logically, they ought to pay a penalty too.. Any views on this?
RE:What about fixed Rate of Interest ?
by Nand Gupta on May 05, 2007 05:09 PM Permalink
the fixed rate is most fixed for the entire tenure of the loan. I may be fixed for 3, 5 or 7 years and then the bank can revised the rate of interest. You should check with your papers whether its a Full fixed or partial fixed loan
RE:What about fixed Rate of Interest ?
by kishore giduturi on Apr 30, 2007 03:38 PM Permalink
Is it a home loan or a personal loan of 1230000 noushi ? There is no floating rate for personal loan
RE:Increase in EMIs.
by Rakish Poulose on May 02, 2007 12:31 AM Permalink
Yes, for a 45 year old lazy dumb clerk working with SBI, you will have to wait for retirement benefits. ROTFL!!!
if possible make a bulk lump sum payment.try and finish off the loan as early as possible.whenever there is any money to spare,whatever the amount may be,credit it to your loan account.i've a emi of 11.000, and that's what i'm doing.
don't know what to do experts say make prepayment but where is the money for prepayment. mu emi has gone uo by 3,500/- per month. am single mother with growing up son.Pl advise. I feel i have to sell the flat and move into smaller flat
RE:rising emi
by VG on Apr 30, 2007 05:27 PM Permalink
Read that Canara bank, Punjab National bank and Oriental bank of commerce are the three govt sector banks offering home loans at much lesser floating rate of interest: around 9.5%. Makes sense to shift the existing loans from the ICICIs, HDFCs and the like to any of the three. What say?
RE:rising emi
by Ravishekhar Mahajan on May 01, 2007 11:35 AM Permalink
This is one discrepancy I have failed to understand. If banks like Canara and PNB can afford to keep the interest rate 9.5%, why isnt it the case with ICICI and HDFC? Any answers? I am sure the govt policy isnt that loose to let these banks come up with their own interest rates.
RE:rising emi
by veerdhaval on May 02, 2007 04:03 AM Permalink
It is a free economy Sir..Nobody complained and asked for govt policy when banks were jumping on each other to give less and less interest rates, now trend is reversed and you want gove intervention..
RE:rising emi
by Kartik Patel on May 02, 2007 07:36 AM Permalink
Don't rush into selling. Wait for sometime (6-8 months). RBI is softening and in medium term interest rates would tend to remain benign. Inflation here is mainly driven by crude prices because crude forms a major part of our import bill. With Rupee gaining strength, imports may become little cheaper and ease down inflationary conditions and so the interest rates.
