Raising money for loan payment

With inflation almost nearing 13%, i expect another round of interest rate hike and the loans becoming dearer. In such a scenario one has the find ways to raise quick money and pay off loans as faster as you can.

Well raising money in India through personal loans is waste as the interest rates are hitting sky. Last week a classmate of mine was enquiring about taking home loans and interest rates. Since he was about to build a 2BHK Individual house in Chennai, he requirement was not more than 5 Lakhs to begin house construction.

I suggested him to go for loans here in US rather then India. I know he had 2 cars since they were a working couple. I suggested him to talk to a credit union to find out more about CAR TITLE LOANS. A week later, he signed a Cheque for 4 Lakhs INR and send it to his Dad in India to be used for starting his house construction.

The Loan Deal, an interest rate of 5.99% APR for 3 years for $10000 against his 2 cars. The EMI per month worked out around $310 for him. He is atmost paying a maximum interest of $900 for 3 years, which works out only around Rs 37000 for years. I am sure no bank in India would lend you loans for 4.2 Lakhs with an interest of Rs 37000 for 3 years.

I still remember I helped a friend of mine to get loan for Rs 1 Lakh and he paid Rs 17000 overall interest for 3 years.

I feel one has to be aggressive during these tough times and make sure you don’t pay unnecessary interest to blood sucking banks like HDFC and ICICI for home loans. Talk to your Credit unions soon and find out how much your car is worth and start pre closing your Home Loan.

Good luck.

4 Comments

  1. With Soaring interest rates, for a amount of 4 lakh at 13% interest a person may be end up paying 85K as interest in India.
    And interest rate may differ from bank to bank and soaring , he would be actually pay more than 1 lakh as interest amount which is almost 25% of the principle.

  2. chandra

    good idea. can we borrow in U.S for buying a house in India

  3. You mean house loan, then i dont think its possible. But you can get personal loan and title loans which is usually cheaper when compared to India.

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