Roti, Kapda aur Makaan meaning food, clothes and a home are the essentials for everyone. We cannot live without food, we need clothes to cover ourselves and a home is everyone’s dream, a shelter, an abode of your own. For food and clothing, one need not take a loan, but for a house, taking of loan is necessary, unless you are born with a silver spoon or have ancestral property.
The word ‘loan’, puts a worry line on one’s forehead. A loan is a commitment we can’t shun or abandon. If we fail to repay a loan, we could lose everything we own. There are different kinds of loans that a bank offers.
Unsecured Loans
Loans that do not require collateral, that is you do not pledge anything for money. But beware the rate of interest for the same is very high. Some examples of unsecured loans are personal loans, student loans, and credit cards. These loans depend on the borrower’s credit history and approval of lenders.
Secured Loans
Loans that need collateral, something to pledge in order to get a loan. The interest rates are lower compared to unsecured loans. A few examples of secured loans are, Home loan, Gold loan, loan against insurance policy or fixed deposits, etc. If the borrower fails to pay the loan, the lender can use the pledged property or gold to recover the loan amount.
Personal loans and credit cards can actually make a big dent in your future plans, hence read the documents and understand the terms and conditions before signing the agreement of loan. If you do not take proper care, you will not know what hit you, and before you recover the damage would be done.
Recently I watched a video on Instagram that spoke about 3 easy ways to repay home loan quickly.
Pay one extra EMI per year.
Increase monthly EMI by 5% every year.
Pay an extra EMI per year and increase monthly EMI by 10% every year.
Looked very interesting and after doing some calculation, I realised it is true.
Hope we all have our ‘Home Sweet Home’, and also live debt free.