By Chaitali Dutta
For my first pucca house at Surat, my home loan was sanctioned by Yes Bank in March 2021 at 8.75% interest. In May 2022, it is 9.78% and Yes Bank is not allowing part pre-payment. My PMAY subsidy application id was generated in June 2021 and reached Stage 3 in Feb 2022. There has been no update since then.
(1) Can I transfer my home loan to another bank after getting the subsidy later this year?
(2) Before getting the subsidy if I transfer my loan to another bank, shall I get the subsidy?
(1) It is clear that your application has not been rejected. You may write to [email protected], to know the reason behind the delay. You are allowed to transfer the loan to any other loan provider. However, the first bank will reverse the unutilised subsidy on your home loan. For the first bank, a home loan transfer is equivalent to a pre-closure of the loan.
(2) In case, you transfer the home loan to a new lender, before receipt of the subsidy under PMAY, then the balance outstanding in your loan account will be taken over by the new lender, and your EMI will be calculated based on the new tenure and interest rate. Here, in this case, you will not be allowed to apply for PMAY-CLSS, as the eligibility criteria would be breached.
If the interest rates rise, will my existing car loan EMI increase?
If your car loan was taken on a floating rate basis, with the increase in repo rate, your car loan interest rate will also go up. You can increase the EMI (keeping the tenure same) rather than increasing the tenure (keeping same EMI). This will ensure a lower aggregate interest outgo.
Is it a good idea to take a bank loan and invest in stocks which have lower valuations now?
The interest payable on the loan may sometimes wipe out the gains in speculative investments such as investing in stocks. Then there will be tax payable on the capital gains on the equity investment. I advise you to accumulate money and then get into equity markets in a planned way.
The writer is founder, AZUKE Personal Finance Advisory (www.azukefinance.com). Send your queries to [email protected]