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How can you beat the rising Home Loan Interest Rates? Read Here

The rising inflation in India has finally taken an unfathomable turn. The RBI announced a repo rate hike by 40 basis points to 4.4% on Wednesday. Along with the repo rate, the CRR (Cash Reserve Ratio (CRR) was also hiked by 4.5%.

The rise doesn’t stop here; the RBI is going to raise the repo rate even further in the coming months, according to reports. According to a report by the Indian Express, there are chances that the RBI hikes the rates by 150-200 basis points this year alone. This will put huge pressure on the home loan borrowers as the EMIs will rise significantly.

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How can you save your money in this situation?

  • The FD interest rates in different banks range from 3.1% to 4.1%, the home loan customers can pre-pay their loan amount with their FDs.
  • The rates are expected to decrease in future, so customers can raise their EMIs for the next 12-18 months to lower the impact of rate hikes.
  • As FD interest rates are not that high, people must invest in short term investments like PPF, short term FDs etc. rather than long term ones.
  • The share market is giving good returns to investors. With proper guidance and research, markets can become an attractive platform to get good returns. The return will be more than 7%, to beat the inflation.
  • People can also start researching more options like mutual funds, and better tax management.

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