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Module Units
- 1. Introduction
- 2. Financial Position
- 3. Emergency Funds
- 4. Financial Habits
- 5. Budgeting
- 6. Financial Goals
- 7. Basic Things To Know While Making A Financial Plan
- 8. Concepts For Successful Financial Planning
- 9. Risk Appetite And Risk Tolerance
- 10. Risk Profiling
- 11. Things You Should Keep In Mind While Investing
- 12. Time Value Of Money
- 13. Power of Compounding
- 14. Inflation Affecting Investment
- 15. How To Plan For The Different Stages Of Life?
- 16. Stage 1: Our First Job
- 17. Stage 2: Marriage And Settling Down
- 18. Stage 3: Financial Freedom
- 19. Loans
- 20. Different Types Of Interest Rates
- 21. EMI
- 22. Plan Your EMIs
- 23. Rising Interest Rates - What Should You Do?
- 24. Is It Always Beneficial To Prepay Your Loan?
- 25. Debt Management
- 26. Loan Restructuring
- 27. Planning For Our Children’s Future
- 28. Effective Strategies To Build An Education Corpus
- 29. Making Your Investments
- 30. Retirement Planning
- 31. Major Expenses Of A Retired Person
- 32. Investor Traits Affecting Retirement Planning
- 33. Myths Associated With Retirement Planning
- 34. The Golden Rules Of Retirement
- 35. Conclusion
Different Types Of Interest Rates
Interest is the price we pay to borrow money. As discussed earlier, the rate of interest is different for different loans. But broadly based on the type of interest rate charged, a loan can be of two types-
Fixed interest rate loans charge a steady interest rate throughout the tenure of the loan. The EMI therefore remains constant during the tenure of the loan. It is generally better to opt for a fixed rate only when the prevailing interest rates have reached rock bottom levels and if interest rates are expected to rise.
Floating interest rate loans charge interest that moves with the market lending rates and thus, is prone to fluctuations. The EMI would increase or decrease depending on the interest rate movement. It is generally better to opt for a floating rate loan only when the prevailing interest rate levels are expected to fall further.
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