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This article discusses the pros and cons of prepaying a home loan. It also helps you decide if you should prepay or not.
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sir,
i want to know how to compute interest rate on savings a/c @3.5% p.a. in India.
Please explain me with an example.
Hi,
Most banks in India calculate interest monthly (although it is usually paid out quarterly or semi-annually). The interest is paid on the minimum balance in the account between the 10th and the 30th / 31st of the month.
Example:
You have Rs. 10,000 in the account at the beginning of the month.
You deposit Rs. 3,000 on the 7th. Balance = Rs. 13,000.
You withdraw Rs. 4,000 on 15th. Balance = Rs. 9,000.
You deposit Rs. 6,000 on 28th. Balance = Rs. 15,000.
Minimum balance between the 10th and the last day of the month = Rs. 9,000. Thus, interest is paid on this amount.
Interest = Rs. 9,000 * 3.5% / 12 = Rs. 26.25
Sir,
What is
* Banker’s cheque ?
* Pay Order ?
* Bank Draft ?
* outstation cheque ?
* Local cheque ?
Hi,
This is a topic that would need an article of its own – I would write about it soon.
Thanks for suggesting an excellent topic!
Dear Sir,
I would like to read this article.Shall be thankful if you please give an access to the same.
I like to read your articles which are very informative and lucidly explained.
Thanks
Remgp
Hi Ramgp,
Thanks for your interest in this article. However, this is an upcoming article.
I would write it and publish it soon. Stay tuned!
Dear Sir
I’m paying home-loan to State Bank of Patiala. I would like to know pros & cons of prepaying home-loan. Please guide me.
Regards
msharma
Hi,
I understand your interest. I would be writing about it soon.
Hi,
Can I take Home loan for a single flat from multiple banks in chunks? For example, I need 15L and would like to take 5L from SBI and 10L from Canara due to the low initial interest offerings from both. Is this possible? Do banks allow this? Can you please clarify?
Regards,
Dhanaprakash
Hi Dhanaprakash,
I do not believe this would be possible, as the banks would not allow this.
When you take a home loan, you have to mortgage the house to the bank – you would not be able to do this for 2 banks.
Sir,
I am looking to prepay my loan but the bank is not ready to recalculate the interest based on shorter time period. They want to close the loan at “current” outstanding principal which is based on their original EMI chart made based on original loan tenure. This EMI chart obviously works in banks’ favor as earlier EMIs go more towards paying interest rather than the principal. Pls guide if this practice by the bank is legal or it can be challenged in the consumer court or forum.
Thanks,
Vijay
u were going to write it on 30 dec 2k7..
itz 19 may 2k10
so whn is it gng to be published ..
My husband plan to buy a house in my name.We both are NRI.He wants to get a home loan in india in his name,since i am a housewife.Is this possible in our.Guide us.
