In the period of high interest rates,people are now trying to reduce the EMI burden of their respective home loan.One way of reducing the EMI burden is to shift the loan from a higher interest rate to lower interest rate loan. Of late, there has been a significant 1-2% interest rate diff between private bank home loans and PSU bank home loans. So one way to reduce ur EMI(if you are a private bank customer) is to shift your home loan from private to PSU banks. Scenario: Private Bank: Home Loan Amount : 20 lacs Home loan Rate : 12% Tenure : 20 years EMI : 22000 PSU Bank: Interest Rate : 10.5% EMI : 19970 Savings in EMI : 2000 Savings in Total Interest paid for the loan : 4,80,000 Penalty(usually 2% of outstanding loan amount) : 40,000 Processing charge of new home loan (0.5% of loan amount) : 10,000
So Total Savings = 4,80,000 - (50,000) = 4,30,000 The saving of 2000 in EMI can be used for good investment purpose. So analyze the current rates in the PSU and try to shift your home loan. As per latest fact,PSUs offer floating home loan rate at 11% while private banks offer at 13%.So you ca then save your money if you act aptly. Subbu. http://investorskool.blogspot.com/ -- Posted By Ronald Chisley to Investor Forums at 8/21/2008 11:01:00 AM --~--~---------~--~----~------------~-------~--~----~ Logon at – http://investorline.co.in/blogs/news Learning Center- http://investorline.co.in/blogs/learning Mutual funds - http://investorline.co.in/blogs/mutualfunds Life Insurance - http://investorline.co.in/blogs/lifeinsurance Investor Journal - http://investorline.co.in/blogs/investor Latest News - http://investorline.co.in/blogger/?q=aggregator/categories/ Create your own Forum & Blog at - http://investorline.co.in/blogger To post to this group, send email to [email protected] Visit this group at-http://groups.google.com/group/investor-forums?hl=en -~----------~----~----~----~------~----~------~--~---
