Credit cards - a boon or bane?
Perhaps I and my husband are a few of those who do not possess any credit card!
We knew the advantage of not having to carry money on us to distant places so we enrolled to get ourselves a couple of debit cards which would mean we can spend only what we have in our accounts, nothing more than that!!
We pay a lot of interest on temporary and long term loans as it is. Banks have to charge us for lending money as thats their basic business.
Yet when we sit down to do simple calculations on the loan taken, the interests paid so far and the balance yet to be repaid to the bank, our heads would go in a tizzy without resorting to any sedatives.
First banks encourage everyone to borrow money for purchase of just about anything these days. The repayment plan on equal monthly instalments (EMI) are very low and very attractive. They tempt us to borrow and get us hooked for many donkey years spent on repaying that sum. The first years' repayments have high interest recovery portions and very less towards capital repayment in any loan plan. When the interest and capital becomes fifty-fifty more than half the laon period is already over. By this time the bank will remind you that there is yet another plan under which you are eligible for some other loan! This continues and you have to work to repay your loans and you have to refinance often if you need extra money.
You are always in debts and the banks ensure this very subtly as they explore opportunities to trap more and more people.
Take the housing loan for instance. In India, property rates were well within means to those who could save some money from their salaries, borrow a bit from relatives and friends to buy a home. All this until the concept of home loans became popular in India. Many could buy homes no doubt. The seed money was kept at say 15% or 20% of the total value of a property with the remaining coming in from the bank after they checked your credit worthiness. This 85% to 80% component started to balloon up due to steady rise in property values from time to time. This ensured that even a high value person would be in debts for years together if he were to go in for house purchase.
But the rents going up would make all of us think of going in for a loan to buy a house and paying our EMIs instead of house rents which will work out to be the same in any case. The lure of owning a house for the payment of 'rent' in the form of EMI to the bank was what fuelled all the abnormal rise in property values even in far off places from a busy city or metro.
With good infra structure connecting places, there should be no problem of commuting from this place to that. But this also does not seem to work for many families who have one child in some school and one in college elsewhere, with dad going to office in quite another direction. Many are the choices and deciding becomes difficult with many in the family fanning out daily on their jobs. Otherwise suburbs are the answer to cheap and affordable flats.
In any case credit card or loans are not the only debts in our lives!
We are indebted to our parents for having us born to them.
We are indebted to our teachers for teaching us lessons - both acedemic and otherwise.
We are indebted to our parents for choosing a good spouse for us
or
we are indebted to our spouses for accepting us as their life partner
We are indebted to our banks who provide loans for the many things which may not have been possible to enjoy in our lives with our limited means but unlimited dreams :D
We are indebted to God for the children he gives us.
We are indebted to all those who help us in any way in doing this chore or that.
We are indebted to the medical people who take care of us while we are sick and in hospital.
We are indebted to those relatives who take care of us when we are recovering from any ailment.
So much indebtedness going around so how does a small bank loan matter. Life means to enjoy the today, the now and if enjoying means having to pay, we can always pay later and pay in easy instalments too.
Cheers!
Mahalakshmi
Showing posts with label Bank Loans. Show all posts
Showing posts with label Bank Loans. Show all posts
Saturday, August 14, 2010
Sunday, April 18, 2010
Dream Home - 2
Dear Friends
How does one select the ideal location for a home or is there a method to this madness at all :)
Four of a family go out in different directions for work or study. Usually the location is decided with the kids in mind. So it invariably is within a comfortable radius to the school with the elder commuting further for work, if need be.
Or is it the proximity to a bus stop, shops, hospitals, workplace and/or schools, if there are school going kids in the family.
The parents are wise if they chose a good neighborhood where the crime rate is less or not at all, where good schools, hospitals are near by. Our investments are based mostly on such parameters when we want to buy a house.
Infrastructure like good roads, proximity to airport and railway stations are welcome too. It pays to be well-connected and have maximum facilities before deciding on a major issue such as selecting a home.
Once these are in place, the plan for the home sweet home starts with how many rooms and how much can we really afford to invest.
Should we be going in for a loan from the bank? In most cases we have to. Then what is the repaying capacity or are we going to overstretch ourselves and grab any money that is dangled before us in the form of loans? We never sit down to calculate the real price of our home if we were to borrow money at interest. It could well be double the cost of the property in say 10 years from hence. When we sell, we look at what we paid at the time of purchase and forget to add the interest we have paid all these years to this base price. So when we are able to find a buyer for a price which is 2 times our purchase price, we seem so happy to have made a handsome profit but have we really :(
All said and done its so nice to live in our own place, get used to our neighborhood, make good friends and sort of settle down, bank loan, repayments notwithstanding!
Enjoy life and living.
Cheers.
Mahalakshmi
How does one select the ideal location for a home or is there a method to this madness at all :)
Four of a family go out in different directions for work or study. Usually the location is decided with the kids in mind. So it invariably is within a comfortable radius to the school with the elder commuting further for work, if need be.
Or is it the proximity to a bus stop, shops, hospitals, workplace and/or schools, if there are school going kids in the family.
The parents are wise if they chose a good neighborhood where the crime rate is less or not at all, where good schools, hospitals are near by. Our investments are based mostly on such parameters when we want to buy a house.
Infrastructure like good roads, proximity to airport and railway stations are welcome too. It pays to be well-connected and have maximum facilities before deciding on a major issue such as selecting a home.
Once these are in place, the plan for the home sweet home starts with how many rooms and how much can we really afford to invest.
Should we be going in for a loan from the bank? In most cases we have to. Then what is the repaying capacity or are we going to overstretch ourselves and grab any money that is dangled before us in the form of loans? We never sit down to calculate the real price of our home if we were to borrow money at interest. It could well be double the cost of the property in say 10 years from hence. When we sell, we look at what we paid at the time of purchase and forget to add the interest we have paid all these years to this base price. So when we are able to find a buyer for a price which is 2 times our purchase price, we seem so happy to have made a handsome profit but have we really :(
All said and done its so nice to live in our own place, get used to our neighborhood, make good friends and sort of settle down, bank loan, repayments notwithstanding!
Enjoy life and living.
Cheers.
Mahalakshmi
Friday, April 16, 2010
The dream house!
Dear Friends!
The wish to plan a home of our dreams. It goes through our minds all the time. when we have enough time we plan it on paper too. How many are able to see it reality?
Many who are employed. With banks coming to help in making this dream a reality. Certainly this is the true cause of why land and real estate prices shooting past a middle class family's reach yet with the temptation of getting easy loans from banks for highly priced flats or plot of land it is possible now to realize it anyway.
Like they say, one thing leads to another, so too are bank loans responsible for our youth not kicking up jobs unless it is for a better and more lucrative job offer. We are bound to the bank in such a way that we keep paying up the monthly installment whether there's money for our basic necessities except for that costly roof over our heads under which it keeps worrying about the next monthly payment :D
Now for the planning part of our sweet home sweet. Do we have any choice really? It is the builder who gives out the plan and we just take it or move on to yet another builder. The business of satisfying a human mind about living spaces is very complex one indeed!! At the bargain prices that we want to fit everything fit for a king.
Before I forget, plans which comply with principles of Vaastu. In case the planning is over and correction as per Vaastu becomes a costly affair then Feng-Shui steps in to ward off effects of such bad planning. Are all these things a thing of the mind? Our minds question the very basis of such concepts passed down from ancient times by our wise ancestors. As I think more on Vaastu I find it is more a way to live in harmony with nature than the scare of not complying with it or worse still following it blindly and being superstitious about it.
Well more on this later when time permits!
Cheers.
Mahalakshmi
The wish to plan a home of our dreams. It goes through our minds all the time. when we have enough time we plan it on paper too. How many are able to see it reality?
Many who are employed. With banks coming to help in making this dream a reality. Certainly this is the true cause of why land and real estate prices shooting past a middle class family's reach yet with the temptation of getting easy loans from banks for highly priced flats or plot of land it is possible now to realize it anyway.
Like they say, one thing leads to another, so too are bank loans responsible for our youth not kicking up jobs unless it is for a better and more lucrative job offer. We are bound to the bank in such a way that we keep paying up the monthly installment whether there's money for our basic necessities except for that costly roof over our heads under which it keeps worrying about the next monthly payment :D
Now for the planning part of our sweet home sweet. Do we have any choice really? It is the builder who gives out the plan and we just take it or move on to yet another builder. The business of satisfying a human mind about living spaces is very complex one indeed!! At the bargain prices that we want to fit everything fit for a king.
Before I forget, plans which comply with principles of Vaastu. In case the planning is over and correction as per Vaastu becomes a costly affair then Feng-Shui steps in to ward off effects of such bad planning. Are all these things a thing of the mind? Our minds question the very basis of such concepts passed down from ancient times by our wise ancestors. As I think more on Vaastu I find it is more a way to live in harmony with nature than the scare of not complying with it or worse still following it blindly and being superstitious about it.
Well more on this later when time permits!
Cheers.
Mahalakshmi
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