Advise on personal loan

POSTED BY Raju ON February 21, 2011 12:03 pm COMMENTS (2)

Dear All,

I am a Qatar based NRI.My bank here offering a personal loan at 5.55% diminishing interest rate. I am can take loan upto QR 12000  nearly Rs 1500000. This is a limited period offer for its salried account holders.I am not able to decide whether to go for it or not? Can any one suggest a suitable investment plan in india  which can give be better returns than my loan interest? I  dont want to invest in Stocks or Mutual funds  as i already have  enough exposure.

Thanks in advance,

Raju

2 replies on this article “Advise on personal loan”

  1. Raju says:
    February 21, 2011 at 5:35 pm

    Dear Ankur,

    thank you for the advise.
    Anyway, bank says no processing fees during the offer period.I will the actual interest rate.Can you suggest ant online software to do that?

    Raju

    Reply
  2. Ankur Lakhia says:
    February 21, 2011 at 1:58 pm

    Raju,

    First of all, you are taking currency risk. You are taking loan in QR and investing this money in INR. Hence, you will have to take a hit if rupee depreciates.

    Second, nominal interest rate advertised can be very deceptive. please check what is EMI and then verify interest rate charged on the same by using some online software. That will give you clear idea of interest rate charged on monthly reducing balance.

    Third, please chek other charges associated with loan offer like processing charges, closing charges, penalty clauses etc and add the charges in your calculations.

    My feeling is, it is not worth to earn little arbitrage money by taking all these headaches. It is better to remain debt free and sleep well.

    Reply

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