Borrowing and major purchases
16 articles
Buy the Car Now, or Delay and Invest?
Waiting turns a financing cost into an investment return and buys a cheaper car. It also costs you the use of the car for the whole waiting period, which is the only part of the comparison that is not arithmetic — and usually the part that decides it.
5 min read
Should You Buy a Home Close to Retirement?
A purchase in your fifties is not the same decision as one in your thirties with a later date on it. Two things change at once — the loan outlives the salary, and the money spent is money that was funding the retirement — and they compound.
5 min read
Buy or Rent a Home: How to Compare the Full Cost
The comparison almost everyone makes — rent against instalment — is the wrong one, and it is wrong in a direction that flatters buying. The right one takes an afternoon and rarely produces the answer either side expected.
7 min read
How Large a Down Payment Should You Make?
Every rupee of down payment is a rupee not invested, earning the loan rate instead — guaranteed and untaxed. That is the same trade as prepaying, made once, at the worst possible moment to get it wrong.
5 min read
How to Evaluate an Education Loan Without Ignoring Repayment Risk
The loan is sanctioned against the admission. It is repaid out of a career that has not happened yet, and the gap between those two facts is where the whole risk sits.
6 min read
How a Bank Overdraft Works and When to Use One
An overdraft is the right instrument for a gap between money arriving and money leaving. It becomes something else entirely when the balance never returns to zero, and the transition is almost impossible to notice from inside.
5 min read
How Loan EMI and Amortization Work
An EMI may stay the same from month to month, but the work it does changes. At first, more of the payment may go towards interest; later, more reaches the debt. A worked example shows why — and why the exact pattern depends on the loan's rate and term.
6 min read
What Loan Instalment Can You Genuinely Afford?
The lender's answer is what you can probably repay. The household's answer is what still leaves the rest of the plan intact through a bad year. They are different numbers, and the second one is not a percentage of income.
5 min read
How No-Cost EMI Really Works
Somebody is paying the interest. The arrangement is designed so that it is difficult to see who, and the honest way to find out takes one question and one subtraction.
5 min read
When Does a Loan Against Investments Make Sense?
Borrowing against a portfolio looks like liquidity without a sale. It is liquidity with a condition attached, and the condition tightens at exactly the moment it is hardest to meet.
6 min read
How to Pay Off Credit Card Debt Without Falling Back Into It
Most repayment plans fail not because the sequence was wrong but because the balance kept being refilled. The arithmetic is the easy half.
5 min read
Should You Prepay the Home Loan or Invest the Money?
A prepayment removes future interest at the loan's own rate, and under stated conditions its result is known in advance. Investing the same money produced a wide range of ten-year results in the Nifty 50 record. Comparing the two means looking at the worst of that range as well as its middle.
8 min read
When Does Refinancing or Transferring a Home Loan Save Money?
A lower rate saves money only if what it saves exceeds what the switch costs, before the borrower stops holding the loan. That is a break-even calculation, and the offer will be presented in a way that hides it.
6 min read
What Affects Your Credit Score and How Can You Improve It?
A credit score is not a judgement of your character or your wealth. It is a lender's estimate of one narrow thing — how likely you are to miss payments — built almost entirely from your past behaviour with borrowed money.
7 min read
How to Use Credit Cards Without Turning Rewards into Debt
A credit card is a safe payment instrument and an expensive loan, and it is the same object either way. What decides which one you are holding is a system, not willpower.
6 min read
Are You Financially Ready for a Home Loan?
A lender's approval measures the probability that you will repay them. It is not a measure of whether the purchase is a good idea for your household, and the two questions have different answers surprisingly often.
5 min read