Looks like you guys got a bug in your calculators. Principal(2217) Interest(1250) should be 3467(EMI) and not 3647. Anyways, thanks for these informative articles. Keep it up.
The question now is why can't banks give Amortisation details before the loan is sanctioned to a customer. This could actually help customers choose the best loan option available.
Re: Publishing Amortisation details before loan is santioned
by Karthik on Oct 13, 2010 11:52 AM
If you ask all the banks will give. Also there are many sites which offer amortisation calculators. Just search in Google.
I have a doubt in this regard and I need clarification from the writer of this article or anybody else. I was told by one person from ‘State Bank of Hyderabad’ that many other banks deduct the EMI amount from principal on some other date than the date on which we pay the EMI. Hence the interest is charged to our account on the basis of ‘earlier principal’ till that date even though we have been credited the EMI amount. He said only his bank will not do so. (That is, credit the amount the day EMI is credited.) He is insisting me to shift over my housing loan from Axis Bank to SBH. Now my questions are: 1)Is it true that banks are crediting the EMI in that manner? 2)If it is so, will it make a big difference (say for a principal of Rs 25 lakhs)? 3)Is it wise to change the housing loan from Axis Bank to SBH?
Re: Nuances of EMI
by Karthik on Oct 13, 2010 11:54 AM
Get the amortisation schedule from Axis Bank and compare it with SBH. Do some basic calculations and see the difference.
Re: Nuances of EMI
by Anuj Kumar Singhal on Oct 13, 2010 12:15 PM
I also have home loan from Axis bank. Axis bank is better choice than SBH. I would recommend not to switch housing loan from Axis Bank. Regarding the statement that banks deduct EMI amount from principal on some other date, is true for ICICI bank but not for Axis bank. Axis bank credit the principal on same day as of your EMI date.
Re: Nuances of EMI
by Bharat on Oct 14, 2010 09:04 AM
Do not take loans from Standard Chartered or HSBC. I had a load from STanChart under th4e scheme called SmartLoan. These people take customers for a ride, as soon as the loan gets disbursed. HSBC - would always increase the rate of interest and never decrease them for a floating rate contract (even when the rates go down - via RBI policies). HSBC also credits the EMI amount after couple of days from the date of payment. Plus the pre-payment policies are quite vague. You need to threaten them, if you want them to waive these arbitrary fees / charges. It is a saying these days in the Home Loan Market - Public Sector Banks will create problem for customer while disbursing.. Private Banks and Foreign Banks will create problems after disbursment - for the entire tenure.
Re: Re: Nuances of EMI
by Bharat Hirani on Oct 14, 2010 02:08 PM
ICICI bank is fraud, every time you ask a statement, they charge you Rs. 100.00. At last I switched mine loan to HDFC and I'm quite happy, as all the statements are available on their web-site along with change of interest option also, which i've already done two times.
Can anyone from the banking sector or financial people enlighten me How the EMI is arrived at? What is the basis for fixing the principal component of the EMI.
Re: EMI
by srinivasan mv on Oct 13, 2010 10:53 AM
shakeel!! EMI can be calculated by using the PMT function in the excel file. By keying in the paramters like, rate of interest, no. of years, no. of instalments in a year and the principal amount, you get the EMI. You can alter the parameters and arrive at an EMI. You will see how bankers play with numbers. Cheers
