Borrow Smart To Boost Your Wealth

Borrowing as a tool for wealth creation may sound surprising, but not when the loan comes at a very low interest rate and helps you build an appreciating asset or minimise high interest cost liabilities.

Since March 27, the Reserve Bank of India (RBI) has slashed the rate at which it lends to banks twice — 0.75 per cent in the first tranche and 0.40 per cent later — bringing down the repo rate to a historic low of 4 per cent, a level last touched 11 years ago during the 2009 recession. As a result of four reductions in the past one year, the home loan interest rate is less than 7 per cent. Not just new borrowers, existing ones, too, can benefit following the RBI’s mandate to banks to link rates to an external benchmark — either the repo rate (at which banks borrow from the RBI) or a treasury bill (a Government of India debt instrument) rate.

Good And Bad Loans

While this may be the best time to borrow