EMI Calculator: Know how people got caught in the debt trap due to cheap home loans!


EMI Calculator: Avnish Kumar (name changed) made up his mind to buy the house of his dreams to take advantage of cheap home loans during the Corona epidemic (Covid 19 Pandemic). He bought a house in the year 2020 by taking a home loan at the rate of 6.70 percent for 20 years from a housing finance company to buy a ready-to-move home. and started living in his house. Then Avneesh had to pay an EMI of Rs 22,053. In 15 years, if he had to repay the principal amount of Rs 25 lakh, then he had a liability of Rs 14,69,629 as interest rate. That is, he had to pay Rs 39,69,629 to the bank in a total of 180 months.

EMI extended at the same time!
While taking the house, Avneesh had never thought that how heavy this home loan is going to be on him. His house is going to spoil the budget. When RBI increased the repo rate in three phases. The effect of this was that Avneesh’s EMI remained the same as Rs 22053, but his home loan which was about to end by paying 180 EMIs for 15 years, his life increased to 18 years i.e. his EMI payment period increased to 216 months. . Now RBI has again increased the repo rate by 50 basis points, then Avneesh will have to pay 234 EMIs after this increase. On the home loan of 25 lakhs, where Rs 14,69,629 was being made as interest, now Avneesh will have to pay interest of Rs 26,79,772 to the financial institution giving the home loan. In the first 180 months, Rs 39,69,629 was to be paid, now Rs 51,79,772 will have to be paid in 234 months. That is, after increasing the repo rate of RBI, Rs 12.10 lakh more will have to be paid to the bank as interest.

Banks increased the number of EMIs
Those who have taken home loans, after increasing the interest rates, banks are not increasing the EMI, but their loan tenure has definitely been extended. That is, such people will be trapped in the debt trap for a long time, whose liability has increased.

People trapped in the trap of expensive debt
In 2022-23, for the fourth consecutive time in the last 5 months, the RBI has made loans expensive by increasing the repo rate. The reasoning behind making debt expensive is that the inflation rate is high and to control it, the loan was made expensive. However, the reality is that ever since the RBI has started taking the decision to increase the repo rate, from private-government banks to housing finance companies, the interest rates are continuously increasing. Due to this decision of his, home loan EMI is becoming expensive.

RBI’s decision increased difficulties
Those who have bought their house by taking home loan in the last two years, their difficulties have increased. Because these people gave home loans to these financial institutions at an interest rate between 6.70 percent to 7.25 percent. But after increasing the repo rate, the interest rate on the home loan had gone up from 8.10 to 8.65 percent. RBI has again increased the repo rate by 50 basis points, so the interest rate is expected to increase from 8.60 to 9.15 percent. Due to which the EMI will become expensive. One, from the price of food items to petrol-diesel, CNG-PNG has become expensive, on which the expensive EMI is ready to slap people’s hard earned money.

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RBI Repo Rate Hike: Loan becomes expensive, EMI will increase, RBI increases repo rate by 0.50% for the fourth time in a row

Home Loan EMI Calculator: RBI gave a shock by making loans expensive, know how expensive your EMI became!

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