How Banks Scam You.

7-8% FD rates have been the talk of the town. FDs are once again back in style owing to the rising interest rates. RBI is being forced to increase it to bring down our inflation. But a consequence of this is higher loan interest rates.
Most people think that home loan interest rates are fixed for the entire 20-30 years. Many reputed publications and influencers were encouraging people to get home loans while they were low. Well, guess it what it doesn’t work like that. Since home loan is a super long loan running decades banks keep it floating. Meaning they change every year depending on RBI rates.
Back in 2020, home loan interest rates were at 6.5%. Now it’s touching 8%. Banks have 2 options. Either increase your EMI or increase the tenure. For a 1 Cr home, the EMI would increase form INR 74,000 to INR INR 83,000. Obviously this requires calling up all the customers and asking them to pay more. The easier option for banks is to simply increase the tenure so that you never realise the pinch.
This is what is happening. What can you do?
Now that you’re aware of this, you can call up the bank and renegotiate the interest rates with them or threaten to transfer to another bank. Banks will comply coz it costs way more to acquire a new customer.
Try to pay the increased EMI instead of increasing the tenure because the interest rates are on the higher end now. You might not get additional tax benefits for the increased EMI since you have already breached the 2L exemption.
P.S. How was today’s editing? Request to share your feedback 🙂
.
.
.
.
.
.
.
.
.
#financewithsharan #homeloan #loanofficer #bank #moneytalks #interestrates