27 Jan 2021 09:28

Joined:	20/04/2018
Level:	Diamond
Points:	49896

Points:	5

Be aware of the EMI burden

After the advent of Covid, one does hear horror stories of people who have either lost their jobs or have salaries that have not increased. And in some cases, where the wife is a private school teacher, she is still in the job, but her salary has been not paid at all. Many hundreds of teachers have been tasked with the online classes in many cases, but the salaries are just 40% of the original.

Never ever believe that salaries will automatically increase and hence one can afford the high EMI. It just does not happen. In Chennai and Bangalore, those who had borrowed close to one crore, and had EMIs of around 88000 to contend with, are now in deep trouble. They have very little money to spend on other essential needs. All this for being holed up in a 2000 square foot flat in a posh locality in a gated community. Even when one lives there, there is also a big maintenance cost that never comes cheap. Many are realizing their folly and want to sell. No takers.

#721703

27 Jan 2021 12:34

Joined:	10/12/2016
Level:	Platinum
Points:	67636

Points:	5

Taking a loan beyond ones capacity is a source of trouble anytime in the life when someone falls under financial crisis and sees that he is not able to pay the instalments in time. So, it is better to live a simple life then go for huge loans and then worry for repayment. EMI is a big trap. I remember that whenever I purchased some high value item through my credit card then I got so many messages suggesting that why to pay this one time and rather pay in instalments. I always ignored those messages. They want you to pay in instalments and earn the interest money on it. That is their business. When it is beneficial to them they will send you hundred messages and try to phone to you frequently. But when you have to call them their phone will never be connected due to its connection through call centre. They think themselves very clever but even a high school student find out their plans by simply using mathematics to calculate the interest burden if we follow their advice.

Knowledge is power.

#721738

27 Jan 2021 19:44

Joined:	02/06/2009
Level:	Platinum
Points:	96313

Points:	5

Yes. It is true. Many people are suffering due to lack of earnings due to COVID 19. Some people lost their jobs and some people are working but not getting full salaries. They are not able to meet the expenses. As mentioned by the author many people are not able to pay EMIs. That is becoming a big issue and I know people who are ready to sell their properties but not able to sell as nobody is coming forward to buy those properties.
So, one should not go for too many loans as these jobs are not certain and we don't know when we will lose our jobs. Many drivers took loans through banks and purchased vehicles and rented to Ola and running them as cabs. From the last 10 months, no customers and they are not able to pay their EMIs. This is a lesson for all the people who take more loans thinking that they can easily repay them. We should always think of a fallback arrangement in the absence of that income.

drrao
always confident

#721764

27 Jan 2021 22:04

Joined:	12/10/2009
Level:	Platinum
Points:	229773

Points:	4

Borrowing should always commensurate with our paying capacity and those who have less salaries cannot think of huge borrowing and that landed them in in high risk debts. Normally the banks are giving 40 times of take home salary as loan and how come the teachers with their paltry salaries would seek huge loan and now facing the wrath of non payments. Surely the bankers would seize the properties and auction them. Some properties are inflated prices and when it comes to reselling it wont fetch and thus the action of cheating is being taken on bankers and the team of field officers.

K Mohan @ Moga
'Idhuvum Kadandhu Pogum "
Even this challenging situation would ease

Be aware of the EMI burden

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