By Chaitali Dutta
l I had purchased a flat with a bank loan five years ago. Now, I will be relocating to Canada. Can I pay the EMI in dollars from my savings bank account in Canada and link the home loan account with it for ECS?—Avinash Shah
The home loan is in rupees. Your income in Canadian dollars will have to be transferred to your non resident external (NRE) account in India. The dollars will be converted to rupees as per the exchange rate of that date. Then you may pay the EMI from your NRE account to the home loan account.
l I had converted my outstanding credit card amount into one year EMI. Now I have got some money from a life insurance policy. Should I prepay the full amount and will there be any penalty?—Ashok Purohit
Yes, it would be better to pay the full outstanding on the credit card loan. There should not be any penalty for it.
l My wife needs Rs 15 lakh as a small business loan. What type of loan will be better for her?—Mahesh Singhal
If she has her business planned out and has made a project report then she can apply for a small business loan. This will be at a lower interest rate. However, if the business is not yet fully thought out and she wants to experiment, then a personal loan should be opted for. The latter will come at a higher interest rate.
l As I need funds for six months, can I pledge some of my fixed deposits and take the loan?—Rajender Singh
Yes, the same bank will be able to offer you a loan up to 90% of the bank’s FD. The interest rate will be slightly higher than the rate of interest on your FD.
l I am planning to take a car loan next year in January. Should I opt for a fixed rate?—R Girish
In a falling interest rate scenario, the floating rate loan is better. That way, the advantage of a lower interest rate gets passed on to you in the future. In an era where interest rates are going up, the fixed-rate loan is better. Currently, we are in a soft interest rate scenario; therefore, please opt for a floating rate loan.
l If my son takes an education loan of `10 lakh, will he have to show any collateral which is in his name?—B R Kumar
Usually, for a Rs 7-10 lakh education loan, there is no need for collateral.
The writer is founder, AZUKE Personal Finance Advisory. Send your queries to fepersonalfinance@expressindia.com