Home loan EMIs can be a nightmare.
While you do have the satisfaction of knowing you will eventually own your home, you also have to grapple with having to spend less money, with fewer treats, with giving up on luxuries that you would otherwise have enjoyed.
We asked Get Ahead readers* to share their EMI stories and advice. Here's what Usha Subramanyam said about switching home loan accounts:
My husband had taken a home loan of Rs 23 lakhs at 8.5 per cent floating rate of interest rate to purchase a flat in Hyderabad. Today, the interest has increased to 11 per cent.
I am a homemaker, aged 31, and I feel that switching home loans from one bank to another does no good to you as a customer and involves a lot of hassles.
A lot of people are talking about switching their loan to other banks if the interest rate charged by their present bank/ home finance company is high. I have a few points, just to help you decide whether it is worthwhile shifting your home loan account to some other bank that offers a lower rate of interest on your home loans.
Here is why I feel you should not switch your home loan account from one bank to another:
1. When banks increase their interest rates, they do not all do it at the same time. Let's suppose the interest you are paying on your home loan is 11 per cent today and another bank is offering you the same at 10.5 per cent.
It may so happen that this new bank may increase the interest rate just after you shift. Moreover, it is also possible that they may increase it to 11.5 per cent or so, defeating the entire purpose of switching your home loan account to avail of cheaper rates.
2. Taking into account the penalty on pre-closure of the loan, the new bank's processing charges and the tax benefit on the interest, you might actually be paying more by shifting to another bank. As a result, this will be a net loss.
3. If the bank wants to really stay in the business, they would want to retain their existing home loan customers. So they would definitely maintain competitive rates.
4. It doesn't make sense to keep shifting banks each time there is an interest rate hike. It involves too much of a hassle.
DON'T MISS!
Are you facing a similar problem? Have EMIs crippled your life as well? If yes, how are you coping? Are you cutting down on your monthly expenses? Are you borrowing to repay your loan?
What solution have you developed for your home loan problem? Share it with other Get Ahead readers.
We will feature the best and the most imaginative/ practical solutions to home loan woes right here. Make sure you include your FULL NAME, AGE, OCCUPATION, HOME LOAN AMOUNT, THE INTEREST AT WHICH YOU HAVE TAKEN THE LOAN and the CITY you are based in.
Your advice could help others manage their home loan problems. Write in now.
* This is a reader-driven feature. The views expressed by the readers on this Web site are their own, and not that of Rediff.com. Rediff.com does not in anyway endorse any contents of the expression of the readers. Please therefore verify the veracity of all content/information on your own before undertaking reliance and actioning thereupon.