Fixed-rate home loan is not fixed for the entire tenure

Fixed-rate home loan is not fixed for the entire tenure

 

Question:

I am a salaried employee with a gross annual income of `6 lakh. I have booked a flat and I am scouting for home loan. Most banks say that I can get about `18 lakh but all are offering a floating rate after the first 3-5 years or so. Please advise if this is okay or are there fixed-rate home loans on offer?

 

Answer:

Just to help the new entrants to a job where the salary structure is low in the initial periods, banks came out with the new home loans where the interest rate is fixed for say 1-3 years. This helps job freshers to manage their outgo and plan accordingly. Thereafter the loan gets switched over to a floating rate. No bank offers you a fixed rate for the entire tenure of the home loan. Although you opt for fixed rate, it will get switched over to new fixed rate after the period stated in your agreement /sanction letter In short, a fixed home loan is not fixed for the entire tenure. You may select your option accordingly.

 

 

Question:

While using a credit card, do we have to bear extra charges of 2% at shops? Dealers say the banks do charge them so they have to charge. Do banks levy such charges to shopkeepers?

 

Answer:

The terms and conditions which specify the various charges & interest being levied by credit card issuers do not specify any charges to be paid to the shopkeeper/ dealers, other than petrol pumps railway bookings, etc. Thus it is an unethical practice by shopkeepers to charge extra for credit card payments. You may bring this aspect to the notice of your credit card issuer so that appropriate action may be taken against the concerned merchant establishment. However, before writing please ensure that he has charged you extra specifically stating that 2 % extra because of use of credit cards. The shopkeeper just adds 2% or so enhances the total bill payable and then gives you a charge slip in which case it may be difficult to prove that he has charged you extra due to payment by credit card.