Do not increase the debt burden due to low EMI: The Reserve Bank of India (RBI) has just kept the repo rate at a 20-year low, making all types of retail loans much cheaper. And to take advantage of this opportunity, a large number of people are thinking of taking Home loans, auto, or business loans.
Do not increase the debt burden due to low EMI
If you are also planning to take a loan, then in order to keep the EMI amount low, you are increasing its tenure. So it will make you less profit and more harm. Not only this, customers who already have a loan and want to extend the tenure to reduce the EMI burden, then they have to think about it.
This may give you immediate relief, but repaying the loan in the long term can increase the burden of lakhs. You should think about it before taking a loan.
Focus on deducting interest instead of EMI
Banking experts say that instead of reducing the amount of EMI, the customer should insist on reducing the interest rate while taking a loan. Since home loans have a longer tenure, don’t extend the tenure just because your EMIs will go down. Its effect will be marginal on the amount of EMI but the total amount you have to pay as interest will be very high.
The long loan will affect savings
Find the right balance between your EMI repaying capacity and the tenure of the loan. Don’t take a very long loan, as it increases your interest, which will reduce your savings in the future.
EMI should be up to 40% of your salary (Take Home Pay). If you do more than this, it will be difficult to meet the daily expenses.