Many banks made changes to their interest rate in the recent past without altering the actual base rate,which meant only new borrowers got the benefit of a lowered interest rate of the floating rate loans and not the old borrowers. However,the situation is set to change with SBI cutting down its actual base rate by 25 basis points to 9.75 per cent from the original 10 per cent. Other banks may follow suit. The existing borrowers however do have options to seek a change in their predicament. They could make a home loan switch to a bank that is offering a lower interest rate,provided they do their due diligence and confirm that the shift will indeed amount to significant savings in interest. They also have the option of opting for a loan conversion for a particular fee within the same bank to obtain the new interest rate new borrowers enjoy.

I want to start planning for my retirement. Could you provide me some tips to be financially secure post retirement?

Sanjay Singh,Pune

One should first do a bit of homework to estimate the amount of retirement corpus that will be required to maintain the current or expected lifestyle post retirement. If you are in your 30s and have a monthly expense of more than R 40,000,then you may need to invest more than R 30,000 per month to help you meet the requirements post retirement. This is to help you invest and obtain returns that will also help you combat inflation. Remember to wrap all your debts well in advance instead of scurrying to complete it in the last years of your career. Also,plan for some amount of passive income that can be generated post your retirement via bank deposits or agricultural income etc. An emergency fund,health insurance etc. are a must. Also,remember to invest more in equity when you are younger and convert that to debt investments as you grow older to protect and secure capital.

What does the term maturity of loan mean?

Debasish Mahapatra,Delhi

The end of the loan repayment term or loan tenure marks the maturity of the loan amount here. Maturity date means the date on which you repay the entire principal amount due.

The expert is CEO,Bankbazaar.com

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