Build your professional network on facebook via our app Go to app
 
 
Posted in Community :

Banking & Insurance Professionals

 

Are Teaser loans a Good thing or a Bad thing for people?

Created by : Rashmi Patil, Financial services  | 11 08 2010 11:21:02 +0000
Industry : BankingFunctional Area : India(Markets)
Keywords : rbi loans home loans reserve bank of india teaser home loans
Activity:  217 views;  last activity : 11 09 2010 09:38:35 +0000

State Bank of India (SBI), the nation’s largest lender, seems to be quite disappointed with the Indian central bank’s decision to raise the provisioning requirement for so-called teaser home loans. In its mid-year review of monetary policy, the Reserve Bank of India (RBI) last week raised the provision for standard assets of such loans five fold—from 0.4% to 2%. Higher provisioning will jack up the cost of funds for banks and discourage them from aggressively pushing for teaser loans. According to RBI, such loans impact the quality of assets as chances of defaults by the borrowers are high.

So, what do you think people, are teaser loans a good thing or a bad thing for people??

  
 Refer 818
Share
 
 
  Rate : 
 
 
Yes Vs No
2
 
 
 
 
3
1
3
Support   Support
 
Top Argument
1
0

Teaser loans induces customers to come in trap for taking loans for housing for long term. It appears lucrative initially but when he has to part with higher interest rates later he feels the extra burden he is really not capable to bear. He curses himself for accepting the loan term when he happens to default his dream for new home is shattered. RBI is right in restricting this type of loan which teases and taxes the peaceful living of a person.

Microsolar Brain
By Kanti Mohan Pandit, CEO/MD/Director, Center- Business Intelligence & Forecasting Cal  11 08 2010 14:35:03 +0000
0
0

teaser loans which is an adjustable-rate mortgage loan in which the borrower pays a very low initial interest rate, which increases after a few years. The teaser loans are offered at 1-1.5 percentage points cheaper than the market rate in the first year. It goes up marginally in the second year and, in the third year, catches up with the prevailing market rate. Later home-buyers don’t find it difficult to repay when the rate goes up as their income level also rises in two years.
By Rashmi Patil, Financial services  | 11 08 2010 11:21:02 +0000
0
0
I think anything which you buy on loan is not a good purchase. Only look for the things which you can afford to buy with the amount of Cash you have for otherwise if you take loan and unable to pay (with interest) it would create a bad image of you.
By anuradha , Education Coordinator, A to Z Technologies  | 11 09 2010 09:38:34 +0000
0
0

 i totally agree with you
By kanukurthy sudershanrao, Operations Manager, Andhra Bank  | 11 08 2010 15:32:58 +0000
Argue for "Yes"
Argue for "No"
 Found the debate "Are Teaser loans a Good thing or a Bad thing for people?"  interesting ?  Suggest to your connections and communities  
 
Viewers also viewed
Owning a home is a dream of every one, A home which actually symbolizes a safe haven of security...
 
117 referals 10 arguments, 707 views
After deciding on a property,the next big thing one does is to look for a good home loan. While...
 
371 referals 3 votes, 129 views
borrower alone should be liable as he is the only beneficiary vs Guarantors should repay when...
 
1187 referals 19 arguments, 412 views
more...  
Recent Knowledge (3)
WE HAD A GOOD NUMBER OF INVENTORS WITH GREATER VISION ABOUT THE SOCIETY. INVENTORS HERE NEED NOT...
 
2 referals 2 arguments, 97 views
These days as I switch on the tv or radio or look at a hoarding I do feel that power of ads I...
 
3004 referals 23 arguments, 482 views
I am associate of prajapati association and i am working for BJP from year 2005 to till date....
 
0 referals 3 arguments, 111 views
more...  
Sponsored Jobs
More From Author
Sometimes our moeny saving thought process is narrow and we do some stupid mistakes which actually makes us spend more than we save. Such mistakes should better be avoided. To avoid first we need to know what all mistakes can we make. So let us...
Integration of goods and services taxation would give India a world class tax system and improve tax collections. It would end the long standing distortions of differential treatments of manufacturing and service sector. The introduction of goods and...
Ego comes naturally ..as you rise you either need to protect yourself from it or it will show its colour. Ego clashes come out of four walls in no time.
more...  
  • Popular Knowledge
  •  
  •  
  • Popular Jobs
  •