Archive for August 3, 2008

Much ado about home loans and prepayment

Publication:The Times of India Mumbai; Date:Aug 19, 2008; Section: Your Money; Page: 21

Street Smart

Consumers should not just look at the absolute numbers and decide whether to retain the loan, prepay partly or complete the payout

There is a lot of hue and cry these days about prepaying home loans. Often, every newspaper will carry some sort of analysis on how the floating rate home loan holders have suffered and if it’s time to prepay. Some analysis clearly suggested that one must prepay the loan considering » Read more..

Interest Rate Management

Publication: Business Standard, Mumbai;   Date: August 3, 2008;    Section:Rate Hike 

The recent hike in the rates will hurt your finances further. Time to do some stock-taking.

Earlier this week, Reserve Bank of India (RBI) governor Y V Reddy surprised everyone with his double whammy. The apex bank increased repo rate and cash reserve ratio (CRR) by 50 basis points (bps) and 25 bps respectively.

Within days, banks revised their rates with the Punjab National Bank (PNB) revising its home loan rates by 100 bps. This was quickly followed by HDFC and ICICI Bank, who raised their rates by 75 bps, effective from August.

In the last few years, the Indian economy has been booming. An inspiring growth rate of 8-9 per cent in the gross domestic product (GDP) has ensured that salaries have increased exponentially. And the rising incomes have translated into increasing demand for goods and services.

» Read more..