My home Loan Interest Went from 6% to 9%🤬😡
Hello there,
I hope you’ve had a fantastic, productive and not-so-crazy week! I know I’m hitting your inbox a wee bit late this week, but with Niyati away for her maternity break and all the new stuff happening for Fincocktail, hectic would be an understatement 🤯🤯 I’m sorry I made you chip away from your weekend to read this but first, tell me…
Market ka haal: The RBI increased the interest rates again! Inflation is still not combatted fully, and perhaps the RBI expected this to happen over the past two weeks :( Other than that the Indian Stock Market has been pretty stable: not too exciting or depressing. However, in the US, Bard, the ChatGPT counterpart by Google’s Alphabet fumbled during a presentation tanking Alphabet's shares. With the ChatGPT wave taking the world by storm, even Google cannot afford to make petty mistakes anymore!
What I was up to: I hosted our first meet-up in Mumbai and my heart was so full (except for the part where I missed Niyati & the rest of our team) because we had so many people show up at the event and it turned out to literally be one of those age no bar situations! We had people who were 18 and one 80-year-old cutie show up at the event to have great conversations about life, finance, careers, etc and it was a very wholesome experience! :")
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Humara Gyaan: I’m a homeowner, and every 2 to 3 months I’ve been second-guessing my decisions because the RBI decides to increase my interest rate!! My interest rate has already gone from 6.25% to ~9%! That’s INSANITY, right!? Most fixed-income investments won’t give me 9% ever… At this rate, I should just start a bank and loan people money.
Well, since that’s not an option, if you’re a homeowner like me with a home loan, dealing with the aforementioned interest rate hikes, here is what I did and what you can do:
Prepay if possible - I chose this option because I didn’t have a prepayment penalty clause and we had some stashed-up investments that were going to give us lesser than 9% for sure, so we decided to put them to good use and reduce our burden!
If you can’t prepay a chunk, try to decrease your tenure by increasing your EMI by a bit. This works simply because the longer your tenure, the more interest you will pay overall & wise versa! If you can put a pin on your needs and actually afford to do this, I’d say GO FOR IT!
If you don’t have investments to prepay a chunk right now and can’t extend yourself to increase your EMI, here’s a third option for you: step up the EMI every year by a certain percentage like 10%. Every year you can try to work towards an increment or add some side hustle to your portfolio to help match up the difference and slowly pay off the loan that way!
I hope this helps you or your loved ones in the littlest of ways to deal with the interest hikes. Thank you so very much for showing us & our content so much love, we really appreciate it!
If there’s one thing you’re taking away from this email, let it be this: there’s always a way to deal with anything if you bother to look hard enough!
That’s it for this week, take care :)
Sayali ❤️
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