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Effect Of Interest Rate Increase On Your Home Loan

 Administrator  02-09-2017   04-12-2017

 Effect Of Interest Rate Increase On Your Home Loan 

Whenever there is an increase in your home loan interest, banks keep the email same and increase the term of the loan. Here is an example of the loan of Rs. 30 lacs for 20 years @ 9.9% & EMI of Rs. 28752. What will be the effect of a rate increase of 2% on this loan?

Rate Increase of Home Loan .5% .75% 1.00% 1.50% 2%
Increase of Loan Term 2.73 years 4.72 years 7.55 years 27.09 years Never End
Total Loan Term 22.73 years 24.72 years 27.55 years 47.1 years Monthly interest is more than EMI

This situation of uncontrolled loan can be avoided by simply monitoring your loan rate and its effect on your loan outstanding. Generally, home loan institutions don?t keep you informed regularly, they increase the rate without informing you and when there is a reduction in interest, they wait for your letter. If your loan is more than 2 years old, there are possibilities that your rate has increased by nearly 2%. In that case, your monthly EMI may not be sufficient to cover the monthly interest on your loan and the outstanding loan may start increasing. Check your existing interest rates and take necessary steps to reduce your rate.

You can keep your loans in control by updating your loan details on Planyourworld, this will give you customized alerts so that you can protect your home and you don?t work for bank only.

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