Increase of home loan? Your action plan

Examine your home loan agreement. If your bank uses an internal benchmark rate, you need to be alert. Start by getting a copy of the home loan agreement. If the bank does not provide you with one, insist on it - it is your legal right. If necessary, lodge a complaint with the RBI.

Keep a tab on the interest rate. You need to track the changes in the interest rate on your loan. Says Ian Hamilton, analyst with Australian consumer infomediary Infochoice:

"Don't sit and forget your loans and accounts; review them regularly and shop around, comparing widely. Don't be afraid to vote with your feet and move elsewhere. But more often than not, you may win by going back to your lender and demanding a better deal."

Fend off agent's hardsell. Don't sign a home loan agreement without spending a few days looking over it. Take your time, and don't feel pressured by your home loan agent -for most of us, our homes are the largest single investment we will make. Above all, remember that the banks need us as much as we need them.

The financial logic in favour of buying a home continues to be compelling. But to exploit the multiple advantages to the hilt, the home buyer has to be on his guard while taking the loan. That's the important caveat to the unchanged home truth.

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