I recently bought a home in NCR worth Rs 39 lakh. I made a down payment of Rs 10 lakh from my savings and rest I got it financed through a private lender at the rate of 8 per cent.
The lender set my easy monthly installments (EMI) at around Rs 25,000 per month for 240 months. In a few days, the country went for the nationwide lockdown to contain the spread of Covid-19 pandemic.
The Reserve Bank of India took several steps to boost the economy. As a result, it announced a series of rate cuts. This also forced banks to transmit the rate cut to end consumers like me.
Banks usually resets interest rate every three months as per the market condition. Following the RBI move, the mortgage lender slashed my interest rate by 35 basis points to 7.65 per cent. This resulted to reduce my EMIs to 224 from 237. Therefore, I can say every basis point counts.
In another update, I would also like to share with you that I insured my monthly EMIs through various plans available in the market. It includes Group Insurance and critical illness cover. In case of any mishap or any severe illness, you don’t have to pay EMI.
Lesson: It is advisable to check interest rates with at least three lenders before applying for any loan. Also, ask lenders to give some discounts on processing fees. Don’t forget to insure your EMIs.
Invest money for better future!
Zero Battey Zero 