By Chaitali Dutta
I need a loan of Rs 5 lakh. Should I opt for a personal loan or take a loan against property?
—Name withheld
If the property value is less than 5x the loan amount, then it is better to take a loan against the property. However, if the value of the property is higher than 5x, then go for a personal loan.
My annual income from salary and rent is Rs 25 lakh. I plan to buy a property costing around Rs 50 lakh. I pay EMI of Rs 40,000 now. How much loan can I get to buy the second property?
—Jayant Kumar
The loan amount will also depend on your age and remaining service period. Considering only the details you have shared, you may get a loan of Rs 40 lakh for the proposed property of Rs 50 lakh.
I had taken a home loan in September. Now, the bank is insisting I buy life and house insurance. What should I do?
—Amit Bapna
The life cover is not mandatory but it is a financially prudent move to have a life cover, as in the unfortunate event, your family is not liable to pay the EMIs. The insurance payout will extinguish the loan and your family can continue staying in the property and will have unencumbered ownership of the asset. Again, it is advisable to have house insurance. The premium is affordable and your asset is covered for natural calamities, fire and terrorism.
Should I pay interest during the moratorium period of my education loan?
—Ashish Sharma
It is prudent to pay the (simple) interest in the moratorium period monthly. This will keep the total loan amount at a lower level, once you complete studies and start paying the EMI.
My home loan interest rate is 9.5% now. If I buy some spreads after paying a fee, how much will the interest rate come down?
—Name withheld
The reduction in interest rate would depend on several factors. The service provider, your CIBIL score, the value of your relationship with the service provider, and the charges for this reset. Do a calculation to check the net savings once the interest rate is reset. If the net savings is sizeable, you may opt for the reset.
The writer is founder, AZUKE Personal Finance Advisory.
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