POSTED BY November 30, 2011 4:25 pm COMMENTS (9)

ONDear Manish,

I have taken loan from a private bank in the year 2006 @ 9.5 and EMI calculated was 15147.00 for 180 months,but when i have calculated as per the method you have mentioned, it comes out to be 14408.And now the interest rate has been raised to 14.75 and tenure to 517 Months. We have not received any intimation on anything. I am very much confused and stressed, what will happen. This way my next gen will also be paying back this loan. I have paid 9 lacs and 13 lacs are still pending. Please suggest and advice me what to do?

Thanks in advance

Dear Navish, 3y down the line, either interest rates ‘ll be on lower side from current level or ‘ll remain same.

Thanks

Ashal

Dear Navish, @ 0.5% fee + service tax 10.3%, the effective fee comes out 7150 Rs. Here is the possible situation – I assume after 3Y, the interest rate ‘ll be on lower side from current levels or ‘ll remain at same levels.

@ same EMI i.e. 15900 – the loan ‘ll be fully repaid in 145 months from now on wards.

@ 18000 Rs. EMI 115 months

@ 20000 Rs. EMI 99 months

So it’s in your own interest to switch over to new interest rate as early as possible.

Thanks

Ashal

That makes sense, Thank you very much for guidance. What do you think of interest rate in future?

Dear navish, it’s advisable to pay that 0.5% fee right now & switch to lower interest rate for 3Y period. Make sure the rate is current rate offered to new customers or 0.25-0.5% more than that.

In between if your cashflow permits, prepay some amount in lumpsum & at the same time, increase your EMi amount to 20K level if possible to you.

All these steps collectively ‘ll bring down your loan to a closing term of 10Y only.

If possible to you please quote – what’s the new rate offered to you & how much prepay you can make in lump sum now or in next 2-3 months? Also indicate the possible increase EMI you may pay?

Thanks

Ashal

Thanks once again, The offered Interest Rate is 10.5%, no prepay as of now and can pay upto 20k PM.

Dear Navish, the rough calculations indicate that the original loan amount was around 1450000 Rs. In the last 5Y or so you have paid back only 1.5L Rs. in the basic loan.

@ 14.75%, you are paying very high interest rate. First of all please check with your existing bank, if possible pay a nominal fee say 0.5% of outstanding loan amount & get reduction in your interest rate from existing 14.75% level to 11-12% level of current rates. From your query it’s not clear that you are still paying the same EMI or a higher one because for 13L Rs. loan amount, the basic mly interest only comes out around 16000 Rs.

If your cashflow permits, after reducing the interest rate, also increase your EMI from current level to say 20K.

In case your bank is not interested to reduce the interest rate or not co-operating you, change your bank & opt for a loan transfer right now. It’s easier said than done but it’s the last resort to you.

Thanks

Ashal

Thanks for your reply, The loan i have taken is of 14 lacs only and yes the EMI has been raised to 15900.00. But can we expect any letter/email/communication from the bank for increasing the tenure and the ROI?

As you have mentioned, Bank is offering the low ROI @ the charge of 0.5 % + Service Tax now but that is for 3 years and afterwards floating market rate. what do you suggest?

[file]http://localhost/jagoforum2/readers-files/EMICalculation-1.xlsx[/file]

Can you attach your excel calculation here? The numbers from the bank dont seem to add up.

[file]http://localhost/jagoforum2/readers-files/EMICalculation.xlsx[/file]

One more question, that is their any fixed criteria for charging Interest Rate and principal amount per month. what is the calculations for that?