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| HOME LOAN DEATH TRAP. |
CHAPTER I - Life is full of Hope
For a Home Loan of Rs. 1,00,000/- from ICICI Bank about 5 years ago.The monthly EMI was Rs. 836/- for 20 years or 240 EMI's
Total Amount to be repaid = Rs.2,00,640/-( 836 x12x20)
The rate of interest was 8.0 %.
CHAPTER II - Opps! The unexpected ( and probably engineered) Metamorphosis.
Since then the following changes have taken place.
The Rate of Interest have changed from
8.00% to 8.50% to 9.50 % to 10.50 % to 11.25% to 12.0% to 12.25%
EMI have increased to Rs. 990 /- from the initial Rs.836/-
The number of months have increased from 240 to an unbelievable 534 !
CHAPTER III- The Reality Now.
The actual picture as of now is like this.
Rate of Interest = 12.25%
Current EMI = Rs.990 /-
Amount paid till date to bank = Rs.55,440/- ( through 56 instalment)
Principal Amount Remaining = Rs. 99,000/-
This means effective repaid amount is Rs. 1,000/- only ( how did they come up with this?)
Balance Amount to be paid yet = 4,73,220/- (478 EMIs x Rs.990/-) Again, how did they come up with this? TOTAL REPAYMENT = Rs.5,28,660/-
ADD additional expenses for agreement, un-required Insurance , extensive paper works etc.
CHAPTER IV - Icing on the Cake
The rate have now further increased by 0.5 % to 12.75%.By their method of calculation an additional amount of about Rs. 79,310 /- will be added on the total. So now the total effective repayment is an astounding Rs. 6,07,970/- (approx.)
Fancy repaying a little less than 6 Lacs on a loan of 1 Lac ?
CHAPTER V - Thoughts & Conclusion.
The banks have drafted their agreements and calculations using all possible loopholes with their acquired wisdom of profit ( not to mention the lack of humanity) in such a way that any changes is beneficial for them. They do this by cowardly hiding behind an ironclad system of disbelief ! ( for the customer). Simply put it says:If the interest is low we will charge you,
if the rate is high we will benefit from you ,
if you sit down you have to pay,
if you stand you have make a deposit,
if you want to lie down and sleep you won't get any
'cos we have already taken away your peaceful sleep
for never ending years to come.
This whole hopeless situation reminds me of the song 'Hotel California' by The Eagles
where they first sing
Welcome to the hotel california
Such a lovely place
Such a lovely face
They livin’ it up at the hotel california
What a nice surprise, bring your alibis
Such a lovely face
They livin’ it up at the hotel california
What a nice surprise, bring your alibis
then comes
Last thing I remember, I was
Running for the door
I had to find the passage back
To the place I was before
’relax,’ said the night man,
We are programmed to receive.
You can checkout any time you like,
But you can never leave!
I had to find the passage back
To the place I was before
’relax,’ said the night man,
We are programmed to receive.
You can checkout any time you like,
But you can never leave!
CHAPTER VI - Best way is the way out.
For people who are subjected to this uneasy feeling, the feeling that something is not quite right its Time to get out of this situation. After all, what man or creature or bank takes a sum equivalent of 6 times from another man? Come rain ,thunderstorm or tsunami one should pay off this loan as soon as possible. CHAPTER VII- The Journey towards Zero
This is a Model Percentage log on the repayment of the same.100 % being Principal Amount to be paid as of May.
The aim is to reduce this towards 0% .Only Pre Payments should be considered.
Reduction from EMI's should be considered a surprise bonus later!
Such situation requires relentless multi pronged attack.
Its a big beast, it will take time before it finally falls.
Let the attack begin !
30/05/2011 - 100.00%
06/06/2011 - 98.23%
15/06/2011 - 96.45%
06/03/2012 - 87.43%
22/03/2012 - 84.02%
31/03/2012 - 82.14%
03/03/2012 - 76.17%
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