a) Deposit rate of 10%. We think for a 20 year term it is pretty reasonable to expect a weighted average return of 10% on the portfolio.
b) Cash discount point has been considered at the end of the article. But not considered in computation table.
c) actually, initially the difference is more & then it goes on reducing. We have used averages for simplification.
d) IT Sops.actually we should have included one important point. Due to the wrong marketing by the HFCs, people are under tpeople are under the impression that they get tax benefits on ADF and they do not get tax benefits on Pre-EMI. Actually, tax benefits are independent of mode of financing. Tax benefits depend only of the completion of construction.
e) Tranch EMI Vs Pre-EMI. Both are more or less similar with the difference that in tranch EMI repayment starts after first disbursement is made. In purely finacial terms, Pre-EMI is slightly better than tranch EMI.
