Among the many documents that you sign when you take a car loan could also be a 'surrender letter' -- a document that declared you a defaulter even before the loan is sanctioned.
In January this year, the stock market started falling. In the following six months, it has lost over 30 per cent. The data on open-ended equity funds show that only a small cluster has managed to wriggle out with very little loss (See table). From a thematic point of view, only global funds have given returns.
This product was first introduced by ICICI Prudential Mutual Fund (ICICI Prudential FMP Series 33) and Deutsche Mutual Fund in February. Recently, Birla Sun Life Mutual Fund has also floated a similar fund. The Nifty return, multiplied by the participation ratio (that is pre-decided by the fund) is the final returns. In Aviator, the participation ratio is 140-145 per cent, leading to returns of 43.14-44.5 per cent in our given example.
With rising interest rates and inflation taking a toll on home loan customers, banks are beginning to encourage them to partly prepay their loans. Many of them are doing so without charging them prepayment penalty.
Investors in SIPs should be especially careful because the taxation is done according to the first-in-first-out basis
When the NAV falls, you are going to get more units of the fund. That means when the market turns around, you will get much more returns
In the last couple of years, reverse mortgage (RM) has been touted aggressively as a product that will allow the elderly to unlock the value of their house. In fact, in the last two Union Budgets, the finance minister has made a special mention about it.
With ICICI Bank recently offering to reduce the equated monthly instalments of existing customers for high tenure loans, many may like to exercise this option because it would reduce their burden for the time being. Also, with the rise in the interest rates in the last couple of years, many have found their monthly EMIs rising by over 15 per cent.
However, financial experts are of the view that though REMFs are good for those who want to participate in the property boom, investors should not look at them as equity funds.
With the Indian Institutes of Management (IIMs) hiking their fees, many general category students will have to approach banks for educational loans. Most will also have to furnish collateral to get that all-important loan.IIM-Ahmedabad, for instance, has almost trebled its fees to Rs 4 lakh to Rs 11.5 lakh. IIM-Kolkata has hiked it from Rs 5 lakh to Rs 7.5 lakh. Others like IIM Bangalore and IIM Lucknow have hiked it from Rs 5 lakh to Rs 8 lakh and Rs 4 lakh to Rs 5 lakh.
Young borrowers have the opportunity to get bigger loans because age is on their side.
In the last few years, unit-linked insurance plans (Ulips) have quietly become one of the largest players in the Indian stock market. With a total investment estimated at Rs 1.5 lakh crore to Rs 2 lakh crore, they are almost close to the investment made by equity mutual funds.
They are aggressive going through the financial details of the customers. All indications that life is going to get tougher for potential home loan borrowers.
The Union Budget 2008-09 will leave more money in every pocket.
In spite of FM's assurance, experts feel that US recession will have definite repercussions on the Indian economy. But it will continue to enjoy a positive run.
Says Gul Teckchandani, investment advisor, "It is that time when you should have a shopping list ready. Look for large-cap liquid stocks that have fallen more than the index and invest 10 to 15 per cent of your cash in them. Also, continue buying if the market falls further."
Last year money-making hardly took any effort, this year you will need to pick and choose.
For prospective buyers, the advice is simple. Go ahead and buy because there is no indication of where the interest rate will be in the next six months.
You could invest if you have missed the earlier rally, you could churn your portfolio to move towards better quality stocks or funds and you could even clear your loans by some profit booking
With the markets at an unprecedented height, it may be a good time to restructure your bag of stocks.
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