By Chaitali Dutta
My daughter will go to Ireland to study. I have enquired about loans from domestic banks and even a few banks in that country. Which one should I opt for and what should I keep in mind when taking the loan?—Pradeep Sharma
A loan in rupee would be advisable if the repayment is expected to be done by you through rupee income. However, if your daughter plans to work in Ireland itself, then she will have income in Euro which will help her in repayment. Generally a rupee loan with better understanding of the interest rate scenario in India, is preferred by parents. Do enquire about the option to prepay the loan in Ireland as and when you have extra funds.
l As I need some money for a short period, is it better to take it by pledging some stocks than go for a personal loan?—Arvind Iyer
In case you have stocks and other financial investments, the interest rate on the loan against these assets will be lower. The personal loan is an unsecured loan hence interest charged is higher. It is advisable to opt for the former.
l I have a home loan outstanding of Rs 75 lakh taken five years ago. I have got around Rs 50 lakh from insurance maturity. Can I repay the entire amount with this and take back the property papers?—Subodh Paul
Yes, you may close the home loan with the funds available. Once the liability is extinguished, the mortgage will be cancelled and you will get back the original deed of the property. In case the property was insured for natural calamities and fire, the insurance continues to be valid. The property insurance document will also be handed back to you after removing the lien of the institution.
l I had never taken a loan. Now, I have applied for a home loan of Rs 50 lakh. After the initial verification, the bank is saying it will charge a higher interest rate as my credit rating is below 750. What should I do to get a lower interest rate?—Anurag Kumar
Immediately for this loan you may not be able to increase your credit rating. Once you have built a history of regular repayments, your credit score will go up. At that point you may negotiate with the bank to reduce your interest rate. Another option is to try a few other banks and financial institutions and get their quote now. Then you will have a few choices on hand.
The writer is founder, AZUKE Personal Finance Advisory (www.azukefinance.com). Send your queries to fepersonalfinance@
expressindia.com
