Friends,

I have a home loan running in India with an interest rate of 9.50 % for 20 years. I am transferring money every month there for the monthly EMI. I might be eligible to get a line of credit here at 5.5% which will good enough to cover that loan and I will be able to pay off this line of credit in much lesser time as compare to home loan duration if I keep on paying the same monthly amount/emi here against the line of credit I have few questions, please guide me.

1) Is it advisable to pay off the home loan in India with line of credit?
2) Will there be any legal/tax or other implications in India if I transfer whole money together from here and pay off the home loan.
3) If I decide to move back to India in future, Is it easy to pay/transfer the amount back to the banks here in Canada every month from India?

Please share your thoughts and experience.

Thanks

-----------------------------------------------------------------
DELHI INDIAN

Quote:

---

Originally posted by DELHI INDIAN

...
3) If I decide to move back to India in future, Is it easy to pay/transfer the amount back to the banks here in Canada every month from India?

...

---

-----------------------------------------------------------------
Give free food http://www.thehungersite.com ||

You have to repay the loan in CAD and Indian rupee is depreciating against the dollar. From this time last year, rupee has lost somewhere around 22%. If you look at it from rupee point of view, you will be worse off taking the line of credit in CAD if rupee keeps falling.

-----------------------------------------------------------------
Give free food http://www.thehungersite.com ||

Thanks Rajcanada and ashedfc.....so it makes more sense to take line of credit and pay off loan in India if I plan to stay long here in Canada and try to clear loc here only.



[
quote]Originally posted by ashedfc

YES, currency exchange rates are a big uncertainity.
You can save some money on the interest rate; but you can also get screwed if Rs shoots close to 60 or vs CAD.. (which can happen very easily).

-----------------------------------------------------------------
DELHI INDIAN

Any more thoughts or experience friends???? Please share as need to take a decision.

Thanks

-----------------------------------------------------------------
DELHI INDIAN

My 2 cents: I would pay my home loan in india through Line of Credit (LOC) if I am able to save due to interest rate but would also consider other factors such as:

calculate how much are you able to save on monthly basis to pay your line of credit

roughly how long it might take to pay completely your LOC (just a tip: LOC interest rate is not permanent it might change next year or after 2 or 3 years and interest rate is uncertain)

calculate the interest on yearly basis you will pay times number of years it will take to pay you off completely. that is an avg $$ you will pay to canadian banks in interest.

if you have a stable employment and can save more then pay off thru LOC else pay by half a amount just to start with and when you are comfortable pay it off completely.

Thanks high Vision,

Another advantage with line of credit is that you have flexibility to pay more or less every month.

Correct me if I am wrong, I believe LOC works like this: For example if you have taken a line of credit of $10000 at 5% interest p.a at interest only option then your monthly interest comes at $ 42 only. And whatever extra you pay over and above $ 42 will be deducted from your principle and interest from next month will be charged on the remaining amount.

My only worry is still the same, what if I move back to India few years from now. Will I be able to transfer money back to Canadian bank easily? Also Will it be advisable considering fluctuation in currency?

Quote:

---

Originally posted by high vision

My 2 cents: I would pay my home loan in india through Line of Credit (LOC) if I am able to save due to interest rate but would also consider other factors such as:

calculate how much are you able to save on monthly basis to pay your line of credit

roughly how long it might take to pay completely your LOC (just a tip: LOC interest rate is not permanent it might change next year or after 2 or 3 years and interest rate is uncertain)

calculate the interest on yearly basis you will pay times number of years it will take to pay you off completely. that is an avg $$ you will pay to canadian banks in interest.

if you have a stable employment and can save more then pay off thru LOC else pay by half a amount just to start with and when you are comfortable pay it off completely.

---

-----------------------------------------------------------------
DELHI INDIAN