Loan To Fulfill Your Requirements
Loan is one of the major requirements for us nowadays
. The living cost is increasing day by day. Therefore many people think to take loan so that they can buy their own house or vehicle. The increase of interest rates is one of the major concerns because it becomes tough to pay back the complete loan. LIC housing finance has just increased the interest rates. They have a separate portion for those people who have taken the loan of more than Rs.75 lakhs. The R.B.I. is continually checking the regulations. They have increased the percentage of risk involved in this section and it is now 125 percent. The value ratio for loan is now 80 percent and NHB is also planning to take similar steps.Banks are trying hard to attract new customers regularly. You can easily find nowadays that these banks are giving teaser rates. These rates are less in the first year and it goes up after that. The average interest rates are 8 to 8.5% in the first year and later on it can go up to 9% from second year. The important question is that are these rates good? A small attention from your end can tell you that these rates are not that much good. The interest rates are less in the first year however a proper calculation clearly says that the customer is paying additional amount by using these teaser rates. It is correct that you are paying less at the beginning. However after that many customers do not understand the terms and conditions and they pay extra. It is very tough for many people to pay the entire amount because the expenses are very high. It is necessary for you to make sure that you know everything what you are paying for. You should clear all your doubts before you take the loan because later on you may not have any option.
There are some banks who are withdrawing these types of rates from the market. One of the banks is Corporation Bank who has just withdrawn the teaser rates from December 1, 2010. SBI has given the request to RBI to clearly explain these teaser loans. Many people have the same opinion that these interest rates are very expensive. It is not easy to pay the entire amount therefore the step taken by SBI is good for most of the people. They have the point of view that there must be a certain eligibility criterion to get the teaser rates.
Similarly personal loans also have high interest rates. Banks usually charge extra if you pay the loan early or if you pay the amount after the date. The terms and conditions should be very clear to you.
by: Zenil Shroff