5 money management tips for home borrowers – The scenario of rising interest rates over the past few months and the expectation of another rate hike should have an impact on the attitude of homebuyers.
Every time the central bank raises the repo rate, lenders pass the burden on to borrowers in the form of higher interest on home loans.
After the recent rate hikes by the Reserve Bank of India (RBI), most banks have started raising their lending rates. For this reason, borrowers with variable rate interest on their loans saw an increase in monthly EMIs.
Rajesh K Saraf, MD, Axiom Landbase Pvt Ltd. said: “One piece of advice that has been repeatedly reiterated to home loan borrowers and remains relevant amid rising interest rates is to repay the loan amount consolidated with the interest rates in installments and in small pieces.”
“It would be a good idea to formulate a monthly strategic plan with a focus on increasing equivalent monthly installments (EMI) against loans. This is the best way to systematically reduce the psychological burden of loan repayments, also known as the name financial discipline in a The Financial Discipline signifies the adoption of a farsighted and shrewd approach to the management of home loan EMIs,” he added.
Saraf further noted, “As interest rates have skyrocketed after the steady hikes in RBI buyout rates, home loan borrowers with good financial knowledge can compare the interest rates charged by different banks and select the one that offers the most feasible loan repayment plans.People who are the beginners or are at a nascent stage of the home loan process can also hire consultants and IPCs to simplify the mechanism. complex home loan plans and help them get the best deal for themselves.
Here’s a quick five-point guide for home borrowers to keep in mind
1) Loans and their EMIs must be repaid intelligently to avoid additional charges and amounts greater than your actual borrowings to avoid losses.
2) Repay the consolidated loan amount with interest rates in installments and in small pieces.
3) Formulate a monthly strategic plan with a focus on increasing monthly equivalent payments (EMI) on loans.
4) In case of real estate investments, one should conduct proper research on recent trends and analyze the projects according to their location and prices.
5) Home loan borrowers with good financial knowledge can compare the interest rates charged by different banks and select the one that offers the most feasible loan repayment plans.
To control rising inflation, the RBI on September 30 raised the short-term lending rate for the third consecutive time by 50 basis points to take the repo rate to 5.9%. Since May, it has cumulatively increased the key rate by 190 basis points.
Shubham Sardana, Director of ElitePRO, said, “Effective money management requires sufficient knowledge of when and where to invest your hard-earned money. Instead of investing the maximum at once or in one only avenue, consider investing in several places guaranteed returns.”
“In addition, loans and their EMIs should be repaid smartly to avoid additional charges and amounts higher than your actual borrowings to avoid losses. In case of real estate investments, one should conduct proper research on recent trends and analyze projects depending on their location and prices. It is advisable to buy properties that are well connected to the important places with ease of access and all amenities within easy reach. Simultaneously, properties in hotspots have yields much more promising than the others,” he added.
India’s consumer price index (CPI)-based inflation in September hit a five-month high of 7.41% from 7% recorded the previous month, with the print remaining well above the upper tolerance level of the RBI inflation targeting framework for the ninth consecutive year. month.
Salil Kumar, Director – Marketing and Business Management, CRC Group, said: “The recent increases in home loan interest rates following RBI guidelines have mainly affected middle class buyers who want to invest in housing. ‘immovable. This has increased the weight of their pockets, forcing them to rethink their decisions to purchase properties. However, this impact is only short-lived and the sector will soon recover from this temporary suspension. This is beneficial for developers as they can reduce input costs with this hike, and the overall project value remains somewhat similar. »
Yash Miglani, MD, Migsun Group added, “Home loan borrowers are at the end of more expensive EMIs and banks raising benchmark lending rates in case of repo rate hike scenario. Buyers of affordable housing projects are the most affected. The housing segment is taking a short-term hit as buyers put their home investment plans on hold until home loan interest rates return to a reasonable level. However, this does not affect the market for only a short time. is motivated to reduce inflationary pressures, which has paid off cumulatively.”