Assume that I’ve a gold mortgage of ₹4 lakh at 10% curiosity. And I’ve money of ₹5 lakh in my hand. I wish to make a set deposit for the ₹5 lakh with the cash I’ve. And take a mortgage on that FD and clear my gold mortgage. Is that a good suggestion?
My view is: On the fastened deposit I get 5% curiosity, and for the mortgage on fastened deposit, I’ve to pay 1% extra to the financial institution, that’s 6%. However my gold mortgage curiosity is 10%. By doing this I’ll save a minimal of 8-9%. How far is my view appropriate? Please advise.
—Title withheld on request
Your understanding of decreasing the curiosity fee through the use of the fastened deposit mortgage to repay the gold mortgage is appropriate from the calculation perspective. Nonetheless, your web financial savings could be round 4% and never 8% or 9% as you might be pondering. You can be paying an curiosity of 6% on the fastened deposit mortgage in opposition to 10% of the gold mortgage. The curiosity of 5% in your fastened deposit will probably be out there for you in each circumstances.
Please examine the desk above to grasp this additional.
Harshad Chetanwala is co-founder of MyWealthGrowth.com.
Supply: Live Mint