personal-finance
How to deal with costlier home loans?
Aug 03, 06:08

During the pandemic, interest rates were historically low. The golden phase of low interest rates seems to be over with the RBI increasing the repo rate by 90 basis points (one basis point is one-hundredth of a percentage point) to curb rising inflation in just 36 days (between May-June). The economists are expecting another 35-50 basis point rate hike on August 5, monetary policy announcement. In a rising rate environment, rethink your loan repayment strategy and consider making prepayments to save on rising interest cost. Just an extra few thousand every month can reduce interest liability. But don't be too aggressive with home loan prepayment strategy, as it can hurt other financial goals.

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