Have a question on loans? This may help you

Published: June 19, 2019 12:20:45 AM

An education loan the EMI essentially starts after completion of the course. In the interim period, you may clear the interest component, every month.

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By Chaitali Dutta

> I plan to take a loan for my son’s higher education. Do I have to pay EMI from the day I get it?
– Gaurav Singh
No, in an education loan the EMI essentially starts after completion of the course. In the interim period, you may clear the interest component, every month. In this period, the interest applied is simple interest and not compounded.

> I want to invest some money in stocks. Can I take a bank loan to invest?
—KS Sujan
As an advisor, I would discourage you to take a loan for investing in equity. This is called leveraging in financial parlance. Equity as an asset class is volatile and high risk. Hence, first-time investors should start small, measured equity exposure with the intent of being invested for 5-7 years.

> My brother wants to go abroad for higher studies. Can I take a loan to fund his foreign education?
—P S Sunder
Yes, you may, if you have a steady income and your father is not earning. It will be a joint education loan with your brother as the student and you stepping in to ensure repayment, as the joint borrower.

> If I repay my home loan, will it affect my CIBIL score?
—Rajiv Kumar Verma
No, as long as the loan is not in default, the CIBIL score does not get affected. In fact, a good credit history will enhance your score.

> I have paid 10% of the booking amount to the builder. Now the bank says the project is not registered under RERA and it will not give the loan. What should I do?
—Bhupinder Singh
As a first step, ask your builder for the RERA registration. If he says it is not yet registered, you have the right to ask for a refund. Do not put money in non-RERA registered properties.

> On what basis do housing finance companies fix lending rates as my HFC (HDFC) has not reduced the rates despite RBI reducing the repo rate?
—Alok Ranjan
This area is a black hole. There is no transparency in the passing on of the benefits of reduction in interest rate by the RBI. HDFC has historically been taking some one-time charges to reduce the interest rate of existing loan accounts.

The writer is founder, AZUKE Personal Finance Advisory (www.azukefinance.com). Send your queries to
fepersonalfinance@expressindia.com

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