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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.


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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