In your story on debt (The Debt Sentence , 8 January), you mentioned that a personal loan is one of the costliest forms of debt. As an alternative, you suggested taking a loan against provident fund as it has a lower interest rate. Isn't this true for loans against others securities as well, such as a loan against fixed deposits and shares? Please clarify.
- Abhay Chaturvedi, Sonepat
Loans against all types of securities enjoy an interest rate that is lower than that of a personal loan. The loan rates vary across banks and range from 11-16%. You can opt for a loan against a fixed-income instrument, but it may not be a good idea to take a loan against stocks now. Banks offer a loan for half the value of the stocks. Currently, all stock portfolios are in the red. This reduces the amount of loan that you can get. For details on this subject, read our story 'Collateral Advantage ' at www.moneytoday.in.
I enjoyed reading your editorial in the latest issue, where you have discussed your messed-up finances. I go through almost all the sections of your magazine and find the information very useful. But I do not understand the need to review personal finance books. I think it is a wastage of space because few investors would take out the time to read the voluminous guides.
- Vikas Kumar, e-mail
We are glad that you appreciated the editorial and hope that our readers will resolve to put their finances in order in 2009. But this is not easy as investors require expert advice, like that of a financial planner, to strengthen their financial conditions. It is a good idea to increase your own knowledge on investing. This is where personal finance books come in. They offer unbiased suggestions and strategies on varied subjects. Go through the past reviews on our website and you may find a book that suits your needs.
I have been trying to work out the calculation in the element 'How long will Rs 61 lakh last Kaushik' (Not a Winner in Finances , 8 January), but my answers are different from yours. Do I have to take into account the tax rates too?
- Gautam Kamath, e-mail
There is an error in the targeted corpus. It is not Rs 61 lakh, but Rs 60 lakh. If you make this change, your answers should match ours. Thank you for pointing out the mistake.
I liked your retrospective (2008 Figure it Out , 8 January), as the collection of numbers put the tumultuous year in perspective. It juxtaposed numbers that sent out contradictory signals, such as the huge drop in the Sensex and the sale of the costliest flat. I hope you will come up with more such articles.
- Dhruv Bakshi, Delhi
Thank you for your appreciation. We intended the story to remind the readers of the changes wrought by 2008 in the personal finance spectrum. The future strategy must factor in these changes.
To Talk Back, write to us at letters.moneytoday@intoday.com
