Will there be a ‘Diwali bonus’ this time?

Author: Neha Dhamija

Among the sectors to feel the heat of nose-diving stocks, IT and Real Estate sectors are the greatest sufferers of this free-falling in market. So, what more reason does an IT professional, paying interest on home loans can have, to look gloomy? As per the calculation, a person who was to repay Rs.60,000 at an interest rate of 11.5% for 20 years is now required to stretch the time period by 7 years.

So, this festive season, frowned and troubled faces have salary cuts waiting to welcome them instead of perks. People are clueless as to how will they get to pay their next instalment without a job.
	The present default rate in India is thought to be below 1%. The reason is that Indian Banks finance only 70-80% of the home’s value. Besides this, the social pressure that mounts also forces the borrower to repay. However, experts feel India could be the next ‘Nation of Home Defaulters’. Add to this the expectations for a further fall in the property prices. A housing Expert, S K Das feels that the current scenario will lead to a property changing hands to bail it out. However, in the absence of family support, defaults are sure to occur.