Your Queries: Take personal loan to clear credit card overdues and avoid high interest

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Considering a total outlay of Rs 85 lakh, you may get a loan of Rs 60 lakh.By Chaitali DuttaI have 1 lakh due on a credit card for which I am paying interest every month. Can I reduce interest burden by converting the due into EMI?—Rahul GuptaCredit cards charge a high interest rate on overdue amounts, to the tune of 24% to 40% per annum depending on the service provider and card taken. You are paying only the interest amount every month on this `1 lakh. You need to pay additional amount every month to reduce your principal outstanding. Even in the EMI option with the service provider, the interest component will remain. Pay off this credit card overdue amount as soon as possible. You may consider taking a personal loan from your bank and paying off the credit card loan.I want to buy a property in Pune after one year. I am 52 years with six years for retirement and my wife is also working. How much loan will a bank give me as the value of the property will be around `80 lakh plus registration?—P K SankaranConsidering a total outlay of Rs 85 lakh, you may get a loan of Rs 60 lakh. That will have an EMI of around Rs 1.25 lakh. If the aggregate monthly, post tax, in-hand salary of yours and your wife’s, is about Rs 2.5 lakh, you are good to go. Alternately, if your income is lower, then you have to arrange for a larger margin money and you can take a lower quantum of loan.If I pay two extra EMIs every year on my Rs 40-lakh loan for 20 years, how much interest can I save?—Deepak AroraConsidering additional payment of two EMIs at the end of the year from the time that you take the loan, you will pay interest of Rs 28.86 lakh instead of Rs 41.79 lakh. This is a saving of Rs 12.93 lakh interest. Your loan will get over in 175 months instead of 240 months.My 28-year-old daughter wants to buy a flat. She wants to take loan and save tax. Registration will be in joint name of my wife, daughter and I. Will there be any problem when she gets married?—Rakesh PrakashI do not foresee any problem in owning this property in joint name. Let your daughter be the first holder. If the eligibility of the home loan is only on her income, she can claim the full benefits for income tax purposes.The writer is founder, AZUKE Personal Finance Advisory (www.azuke finance.com). Send your queries to fepersonalfinance@expressindia.comGet live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

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