which is best the best option for home loans? Floating Interest Loan? or Fixed Interest Loan?. Lot of people will confusing about housing loans option. Are you also in dilemma? Pl. go through this article.
Floating Interest Rate: 90% of people will choose opt. floating rate of interest. In this option rate of interest will be low than fixed rate of interest. But generally people will option for there loan period for 20 - 25 years, in this period RBI may change interest rate. If RBI change interest rate in this period your housing loan rate of interest will be effect. If RBI decrease rate of interest your loan's rate of interest will be decrease. If RBI increase rate of interest yours housing loan rate will be increase. If your loan amount is Rs. 10 lakhs your EMI's chance to change between in 9500-12000 as per RBI's rate of interest.
Fixed Rate of Interest: Less people will opt this option, why because, at the time of loan this option's rate of interest will be high than the Floating Rate of Interest. Generally at the time of loan which ever is less interest option people will opt that option only this is human mentality. In this option EMI will not change. If one person a loan for 20 lakhs for 20 years if his EMI is Rs.22000/- it will same for 20 years. with unchangeable EMI this person make his budget plan easily.
Fixed-cum-Floating plan: In now a days financial institutions are offering this Fixed-cum-Floating interest rate plan. With this option some years rate interest will be fixed and later it will be shift to Floating rate of interest rate plan. When it turns for floating rate of interest account, your housing loan rate of interest will be effect as per market rate.
Which is best option?: Those person who live a monthly budget plan they must to opt fixed rate of interest plan. With this plan your Housing loan interest rate never change and EMI also. Those people who are not ready to face any financial risk through hike of interest rate fixed rate of interest option is always better option. Not Only that, there is chance to shift to floating rate of interest from fixed rate of interest with some amount of fee.
Those who persons ready to face risk when interest rate hike and enjoy when interest rate down that people may opt Floating rate of interest. They may get benefit in 1%-2.5% interest rate in their loan period of 20-25 years.
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