Sharad Patel*, is yet another home loan borrower like Brijesh. He was just 25 years old when he managed to buy a two bedroom apartment in Virar, a bustling suburb at the far end of Mumbai's northern corner, by taking loan from his relatives and a private sector bank in 2004.
At 885 sq ft it was indeed an achievement for Sharad who had, until then lived in a small 225 sq ft tenement with common toilets. While a loan of Rs 6,90,000 -- at 8 percent floating interest rate and a tenure of 240 months -- was a huge burden, he was confident of managing an EMI of Rs 5,559 out of his monthly earnings of Rs 13,000.
Sharad, who works as a quality assurance manager in a diamond factory, also makes a neat Rs 10,000 by doing odd jobs every month. This was the reason he wanted to remain anonymous lest his company finds that he moonlights for other companies as well.
With Rs 25,000 in actual earnings every month it was not difficult for him to manage repaying his home loan EMI and support a family of five including him. Sharad's wife, his two children aged 3 and 4, and his mother depend on him.
The wheel of fortune soon turned when some 18 months back interest rates moved up. Sharad's EMIs shot up to Rs 7,144. With his earnings still about remaining the same Sharad today is trying hard to eke out a living for himself and his family.
"Adjusting all my expenses has become very difficult today," admits Sharad. He thinks the Reserve Bank of India Governor Dr Y Venugopal Reddy will soon increase key banking rates to tackle inflation, which hit a 16-month high of 12.63 percent. With this in mind he is already gearing up to pay higher EMIs in the coming months by cutting down his expenses.
"I am not able to manage but I have to do it. I have started cutting down heavily on my family expenses. Earlier we would go on vacation to our native place in Gujarat twice a year. Now we don't go even once a year," says a crestfallen Sharad.
Like Brijesh, Sharad too rues the fact that more than 95 percent of his EMI amount goes towards interest repayment. Out of his current EMI fo Rs 7,144, only Rs 102 makes up for the principal and the balance Rs 7,042, goes towards interest payment.
However, unlike Brijesh, Sharad's monthly salary hasn't quadrupled and this has added to his depression.
"Sometimes I feel that very soon home loan borrowers like me will also hog the media limelight for incidents of suicides because of our inability to pay our EMIs," he says with a heavy voice.
*Name changed to protect privacy.
Photograph: MANPREET ROMANA/AFP/Getty Images
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