Understanding Loan Interest
Interest isn’t a fee; it’s Rent. The longer you stay in the bank’s “money house,” the more rent you pay.
- The Amortization Trap: In the first few years of a home loan, 70-80% of your EMI goes toward interest, not the principal. You are mostly paying rent, not ownership.
- Flat Rate Scam: Never sign a “Flat Rate” quote without converting it to the Effective Rate (IRR). 10% Flat is roughly 18% Reducing.
- The Reset Clause: Most “Fixed” rates aren’t truly fixed; they have clauses that allow banks to hike rates if market conditions swing.
Watch this video to learn how to “Pivot” your interest regime and save lakhs in conversion fees.