Tagged: Loans

ATM :: 7 easy fund-raising options to offset unexpected wedding costs

No need to press the panic button. You can still ensure your child has the dream wedding you envisioned.
Rajeev Mahajan | May 15, 2018 08:27 AM IST | Source: Moneycontrol.com

ATM

Preparing for your child’s wedding? You may want the nuptials to be fabulous – with a dreamy ambiance, excellent food and scented flowers. While Indian parents invariably create a decent corpus for the auspicious occasion, there may emerge a scenario when the budget spirals out of control and resources are just not enough.

No need to press the panic button just yet. You can still ensure your child has the dream wedding you envisioned. Read on for some easy options that can help you in organise the funds needed for the special day.

Personal loan
A personal loan is an excellent way to defray expenses without fretting over offering collateral. Most financial institutions, including nationalised banks and NBFCs, offer personal loans. Since it is unsecured in nature, the interest rate is a tad steep and ranges between 14 percent and 24 percent a year. There are, however, a few criterions for sanction, chiefly your monthly income.

Lenders also review your current financial health, monthly commitments, debt payments, assets, existing equated monthly instalments (EMIs) and unsettled loans. They look into your credit report and score. Simply put, lender needs assurance that you have the resources for loan repayment.

Loan against property
This is another option that provides you a financial buffer against unexpected wedding costs. You can pledge residential/commercial property or a plot of land at its prevailing market value to avail funding from a bank.

The approval for loan against property is straightforward, provided all valid documents are in place. Since it is a secured loan, the rate of interest is affordable as the lender can recover the borrowed amount by selling the mortgaged property in case of default.

Wedding loan
One can also avoid a cash crunch by opting for a wedding loan. These loans are granted by many financial establishments under the personal loan category. A wedding loan is sanctioned on the basis of factors like your employment status, net monthly income, credit score, past loan history and your ability to pay back.

Given that no guarantor is required, the interest rates are high. Also, the tenure option is flexible. You can avail the pre-payment facility and settle the outstanding balance amount before the due date, thereby saving on the high interest rate.

Loan against securities
Another way to ease the financial burden of your child’s wedding is by opting for a secured loan. Banks and financial institutes offer assistance against mortgage of financial assets: term deposits, savings certificates or life insurance policies. The amount sanctioned depends on the value of the collateral. Since lenders have the security of retrieving their investment in the event of an interest rate default, the interest rate is low around 12-15 percent annually. Also, unsecured loans don’t require much documentation.

P2P lending platform
Do you have a less favourable CIBIL score? You may want to consider a peer-to-peer (P2P) lending platform to raise money for essential wedding expenses. The P2P route though still in infancy is being viewed as an attractive alternative to personal loans.

The online lending phenomenon is uncomplicated and allows you to borrow money directly from investors at attractive rates on the basis of your creditworthiness. What’s more, the entire funding procedure is accomplished with speed and without too much paperwork.

Crowdfunding campaign
Looking for another alternative to bail you out from a stressful situation? Adopt the crowd-funding path to offset some of the rising wedding costs. It is an innovative measure that can help raise funds quickly to cover the shortfall. In recent years, crowdfunding websites have mushroomed in large numbers.

The concept is simple. Just create a compelling page online along with a target amount and then share the link with close friends, neighbours, relatives, co-workers, among others. You might be surprised at the number of contributions that come towards the wedding kitty.

Borrow from family members
Tried all the above options in vain and still running short? Seek the support of close family members to tide over the wedding expenses that have suddenly emerged. But before taking this step make sure you have a repayment plan in place after the big day.

This is important since loans taken from loved ones are interest-free and flexible with no signed agreement. The best way is to hand over a promissory note with the assurance that the borrowed amount will be reimbursed by a specific date.

Exploring the above funding options will help you in planning your child’s wedding without any financial constraints. It is important to exercise restraint and not exceed the wedding budget drastically, so that the borrowings do not lead to financial distress. At the end of the day, one must remember that the loan acquired is a debt that has to be repaid.

The writer is Co-Founder, CEO & Director of Antworks Money

Source: https://bit.ly/2GjJJiM

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NTH :: Do not reject loan application based on CIBIL score, says HC

STAFF REPORTER | MADURAI | UPDATED: APRIL 22, 2018 04:14 IST | The Hindu

NTH

Coming to the aid of a law student who sought an educational loan from a nationalised bank, the Madurai Bench of Madras High Court has directed the bank to consider the loan application and disburse the loan within two weeks.

Justice M.S. Ramesh, hearing the plea, observed that nationalised banks had time and again rejected loan applications based on the CIBIL reports of family members.

The student being the principal borrower, the status of parents and family members could not be a criteria for rejecting the application. CIBIL score should not be a ground for rejection of an application. It was a wilful disobedience of various orders passed by the court in this regard, making this case liable for contempt of court orders. The Head of Indian Bank, which had rejected the loan, was directed to issue necessary directions to all its branches in the State to refrain from rejecting educational loan applications on such grounds.

The court was hearing the case of M.Hariharasudhan, a law student of Prist University, Thanjavur, who had sought an educational loan of Rs. 70,000 from the Indian Bank. He moved the High Court after his application was rejected based on his father’s low CIBIL score.

Source: https://bit.ly/2Ht9X3D

ATM :: Planning your Taxes and your Loans

To avoid last-minute hassles, it is always good to plan taxes and loans in advance.
Sep 15, 2017 06:29 PM IST | MoneyControl.com

ATM

In order to avoid any last minute hassles while filing your tax returns, you need to ensure that you plan your taxes in advance. If you have the right foresight and plan your loans and taxes properly, then you can surely save a lot of money.

Here are some key details on planning your taxes and loans…

Salary restructuring

There are a few components which can help in bringing down your tax liability. For this, you need to reallocate your salary. Like medical expenses which are reimbursed by the employer, certain food coupons, house rent allowance, leave and travel allowance etc., should be used efficiently to bring down your tax liability.

Proper use of tax exemption

There are several tax saving options under 80C and 80D. Under 80C, you have options like NSC, PPF, a premium of life insurance, 5-year FD with banks and post office etc. 80D includes premium paid in Mediclaim policies.

Your tax plan and financial plan must go hand in hand

Your tax-saving plan has to be in tandem with your financial plan. Opt for tax-saving options which will contribute to achieving your financial goal.

The loan factor

There are loans which can actually help in reducing your tax burden. So, you should ensure that you make use of this benefit to the maximum.

Exploiting the loan factor:

If you are planning to take a home loan for buying a home, then restructure it in the best possible way as it can give you tax benefits. Under Section 80C, the principal repayment of housing loan can give you a deduction of up to Rs 1,50,000 and under Section 24B, the interest paid on a housing loan can get you a deduction of up to Rs 2,00,000.

Now, if the home loan amount is huge, then it may cross the tax exemption limit. In such cases, you can opt for a joint loan with spouse or parents or siblings. This will help both the individuals to get the tax benefit. It, thus, becomes a useful tax-saving option for the entire family. It should be noted that stamp duty and registration charges that are paid while transferring the property are also eligible for income tax deduction under the Section 80C.

If you take a loan to buy a second home, then to you can get the advantage of tax deductions under Sections 80C and 24B. Under Section 80C, the principal loan amount will be considered and under Section 24B, the interest paid towards the loan will be considered.

Education loan can also be taken for self or for your spouse or children. You can get tax benefits if you take the loan from a scheduled bank or a notified financial company. You can easily claim a deduction for payment of interest. The tax benefits can be enjoyed for a maximum period of eight years or on the term of the loan repayment.

Personal loans also come with the tax advantage. Personal loans which are taken for renovating or repairing home are helpful. Personal loans taken to make down payment of home loan will also give you the advantage of tax benefit.

To sum up…

Thus, there are different ways and means of reducing your tax liability. Loans give you the dual advantage. They take care of your financial needs i.e., buying a home or higher education of your children and at the same time, they also give you the much needed tax-benefit. So, explore all the pros and cons of the various loans and use them to plan your taxes effectively.

Source: https://goo.gl/FAj4J9

ATM :: 7 ways to get a loan quickly

By Namrata Dadwal | ET Bureau | Updated: Sep 18, 2017, 03.42 PM IST

ATM

A financial emergency can hit any time—a sudden hospitalisation, a natural calamity or even an unexpected celebration at short notice.

While money pundits say you must have an emergency fund equal to six months’ expenses in place, not everyone follows this rule diligently.

So, where do you get cash instantly to tide over a financial disaster? Don’t despair. There are a few ways you can get money in a pinch, depending on how urgently you want the funds. “The key things that will determine where you get the money from are how urgently you want the funds, the tenure of the loan, the interest and how expensive will it be to source the funds,” says Navin Chandani, Chief Business Development Officer, BankBazaar.com

Before you opt to borrow money, be sure that it is really needed. Even then, borrow as little as possible. Remember, it is a loan and you need to ultimately repay it. If you are unable to do it on time, you could end up in a debt trap.

1. BORROW FROM YOUR EMPLOYER
Interest rate : 5-8% ( Could also be interest-free.)

“If you need funds ASAP, consider your workplace first. Many companies extend an advance on salaries,” says financial trainer P.V. Subramanyam. The funds could be equivalent to 1-6 month’s takehome pay and will be deducted from the salary over 3-24 months.

Upside : The loan can be custom-ised to your needs, and you will be able to get the money within three days.

Downside : The loan will be taxable as part of your salary. It will be exempt only if the funds are used for certain medical treatments or if the amount is less than Rs 20,000.

2. CASH WITHDRAWAL ON A CREDIT CARD
Interest rate : 2-3.5 % a month

A credit card can be used to withdraw money from an ATM, the amount being equivalent to 40-80% of your card limit. However, there might be a cap on daily cash withdrawal. Most banks will allow you to over-extend your limit on a caseto-case basis. Be ready to cough up an over-limit fee over and above the usual interest rate on cash advance.

Upside : Instant cash, available anywhere, anytime.

Downside : A transaction fee of 2.5-3%. Interest is levied on the money from the day it is withdrawn until it is fully repaid.

3. TOP-UP LOAN
Interest rate : 9-13%

Already have a home loan? If yes, you can use it to get a top-up loan of up to Rs 50 lakh for a maximum of 20 years or till the balance tenure of your original home. This option works if you have repaid the original home loan for some years as the combined value of the home loan and the top-up cannot exceed 75% of the value of the house.

Upside : You can get a loan quickly, in three days, since the bank has your documents.

Downside : Any default in repayment could cost you big.

4. PERSONAL LOAN
Interest rate 13-24%

One of the quickest options for borrowing money. You can get a loan within 30 minutes to three days, depending on your relationship with the bank. In fact, you might already have a preapproved loan in your name from your bank which will make the process faster.

Upside: Quick disbursement if you borrow from your own bank.

Downside: High interest rate and processing fee of 2-3%. You will also have to pay GST on EMIs. For prepayment, a foreclosure fee of 2.5% of the outstanding amount is charged.

5. LOAN AGAINST PROPERTY
Interest rate 9.5-13%

If you want a large loan and own a house, you could take a loan against property. You can loan Rs 5 lakh to Rs 10 crore, depending on the market value of your house. The loan tenure varies between 2 and 15 years. Both residential and commercial properties can be used as collateral. Banks could to lend you up to 65% of the value of your property. However, the house must be insured. Processing fee is 1.5-2% while prepayment charges are 2-3% of the outstanding.

Upside : Quick disbursement, lower interest charges.

Downside : If portfolio value declines, you will have to put in the differential or pledge more funds/shares.

 

7. LOAN AGAINST GOLD
Interest rate : 10-17% from banks
14-26% from non-banking financial companies

You can get 60% of the value of your gold and can borrow from Rs 10,000 to Rs 25 lakh. The tenure is usually 6 months or 12 months but you can renew the loan at a nominal charge. While you can repay part of the loan whenever you want, gold you have pledged as collateral is released only after you repay the entire loan.

Upside : You can get funds within a day.

Downside : Gold appraisal charges of Rs 250-2,500. If you are unable to repay loan, you will lose the gold.

Source: https://goo.gl/PQWxPi

ATM :: What does your credit score say about you?

Your credit score indicates your financial health, thereby determining your creditworthiness. Credit scores are provided by institutions such as CIBIL, Experian etc., among which, CIBIL is the most popularly used mechanism for lending. Credit bureaus assign a score to you on the basis of evaluation of your loan repayment habits and credit card history.
By: Adhil Shetty | Published: March 24, 2017 12:46 PM | NDTV Profit

ATM

Your credit score indicates your financial health, thereby determining your creditworthiness. Credit scores are provided by institutions such as CIBIL, Experian etc., among which, CIBIL is the most popularly used mechanism for lending. Credit bureaus assign a score to you on the basis of evaluation of your loan repayment habits and credit card history.

How to read your credit score
The credit score is typically represented in a triple-digit number ranging between 300 and 900 points. While higher points reflect financial discipline and a good credit standing, lower credit scores reflect poor repayment habits—which, in turn, could reveal poor money management skills. Banks and lending institutions usually prefer a credit score of 750 and above for issuing a loan or credit card. A high credit score could help you get loans at the best interest rates available. For people who do not have a credit history, the credit score reflects to be -1.

What does your credit score say about you?
Let’s look at the various aspects of your financial life that your credit score throws light on.

Timeliness: A crucial component in computing your credit score is timeliness in repaying loans and credit card bills. CIBIL, for instance, gives timely repayment about 35% weightage in calculation of credit scores. If you pay your bills on time, you are considered to be disciplined and committed towards the repayment of your dues. While a one-off case of delay may be ignored by the credit card company, repeated delays would earn negative scores.

Trustworthiness: Banks and financial institutions consider you to be an eligible borrower if your credit score is robust, as it reflects trustworthiness. A poor score indicates increased dependence on credit and lack of timeliness in repayment, which after a point may reflect lack of integrity and therefore intent to pay back.

Credit hungriness: A credit report also indicates your dependence on credit. This is assessed in terms of your credit utilization ratio, which refers to the percentage of credit you use from what’s available. A high credit utilization ratio shows credit hungriness irrespective of when you repay it.

What if you don’t have a credit score?
It may be great to never have to take a loan. But from the point of view of developing a credit history, it’s important to have some form of credit, be it loans, credit cards, or EMI store purchases.

If you have never availed any form of credit, the credit bureaus and banks wouldn’t have a credit history to analyse you with. This could make things tricky for you if you approach a bank for loan in future.

So, how do you show a history of timely repayment? You can start with taking a secured loan or credit card and maintain a record of timely repayment to be on the good books of the banks.
(The writer is CEO, BankBazaar.com)

Source : https://goo.gl/RiZa4E

ATM :: When does your spouse’s CIBIL score matter?

Rajiv Raj – CreditVidya | Aug 22, 2016, 02.26 PM | Source: Moneycontrol.com
Your CIBIL score is a measure of your own credit worthiness that does not get merged with your spouse’s after marriage. There are several myths about CIBIL score and some of them are related to marriage.

ATM

Marriage is a big decision that brings together two persons for life. Just like two individuals with completely different backgrounds with regards to education, lifestyle and career choices remain the same even after marriage, so does one’s CIBIL score. Your CIBIL score is a measure of your own credit worthiness that does not get merged with your spouse’s after marriage. There are several myths about CIBIL score and some of them are related to marriage. Today we will debunk some of these myths and also tell you when and where your spouse’s credit score matter.

Myth: CIBIL score drops after marriage
If you are marrying someone with a relatively less CIBIL score then it does not bring down your CIBIL score. Of course if you have taken a huge amount of debt on your credit card to fund a lavish wedding or an exotic honeymoon and are unable to repay it as stipulated, your CIBIL score may take a hit after the marriage, but that has to do with your credit behaviour and not with the act of getting married by itself.

Myth: CIBIL records get erased after marriage
If you are a lady who has decided to change your surname and take on your husband’s family name after your marriage, you do not need to worry as your CIBIL records do not get erased automatically if your name changes. Once you have changed your surname officially you make the changes to your official documents and pass on the information about the same to the bank. The bank in turn makes the changes internally and passes it on to CIBIL with your updated record. However, to be sure that the changes have been carried out as per your official documents, do check your CIBIL score and report after about a month or so of having updated your name change information with your lenders.

Myth: All your spouse’s debt becomes yours after marriage
Surely you have taken vows to be with each other through thick and thin, but getting married does not mean that all the debt burden that your husband or wife carries is automatically transferred on to you and you need to share his or her burden as it will impact your CIBIL score otherwise. The loans or credit card debt that your spouse is servicing continues to remain with him or her. Of course you may choose to assist him in meeting his debt commitments, but doing so does not have an impact on your own CIBIL score.

Where your spouse’s CIBIL score really matters
You only need to be concerned about your spouse’s credit score if you are making a joint home loan or any other loan application together. If either of you have a poor CIBIL score, the chances of your getting a loan may get thwarted as the bank will not look favourably upon one person shouldering all the load. Thus it is recommended that you work together to bring up both your scores to the level of 750 and keep it at that by maintaining good credit habits to prevent the rejection of a credit line when you are in need of it.

If you are newly married and have just come to know that the CIBIL score of your partner is not so flattering, do not fret as it has no impact on your own CIBIL score. Nevertheless, put your heads together to find out the problem areas and help each other to come up with solutions that will rectify the situation.

Your financial compatibility will be put to test through trying times. The basic thing is to stay put and work hand in hand to achieve a common goal of bringing up the CIBIL score. Just like with everything in life, being there for each other is what matters the most and that is what you should decide to do.

Source : http://goo.gl/4Xx0SL

ATM :: Credit Score: What you don’t know about it?

Though most of us have heard about CIBIL score, there are so many things many individuals are not aware of.
Rajiv Raj Founder & Director, Creditvidya.com | Aug 01, 2016, 08.06 PM | Source: Moneycontrol.com

ATM

Awareness about credit score is quite low in India and the few who know about it also might not be aware of the finer details of the process of ascertaining the credit score or its importance and what impacts the credit score of an individual. As we move towards a more digital world, everything is more linked, which means that soon the importance of a CIBIL score will go up while taking a loan; it may impact employment prospects, insurance premiums and so on. Thus being aware of credit score nitty-gritty can be use full.

Q. Are credit report and credit score the same thing?
The first thing that we need to know is that credit report (CIR: Credit Information Report) and credit score are not synonymous. While the credit score is a three digit number or sometimes it can be NA/NH or -1, the credit report is a much more detailed document. The credit report carries the details of all the loans and credit card one holds, it lists personal information, contact and employment details, status of dues, credit enquiries etc. Lenders look at the report and not only the score to get a comprehensive picture about the debt status of an individual.

Q. Is CIBIL the only credit score company in India?
CIBIL is the oldest credit score agency for individuals in India. Since it was the first one and was the only one for a long time it is the most well known and almost synonymous to credit score in India. Apart from CIBIL there are three more agencies that provide credit score for individuals; they are Equifax Credit Information Services Private Limited, Experian Credit Information Company and High Mark Credit Information Services.

Q. Will my score across agencies be same?
No, the CIBIL score against various credit agencies will not be same. There may be a slight difference due to the scoring model of each agency. While the basics of calculating the credit score remains the same, each agency may use a different algorithm for calculating the score which can cause some variation. However if an individual follows the basic tenets of responsible borrowing then his/her score is expected to be good across all agencies.

Q. What impact does settling an account have on the Credit Score?
If one settles an overdue amount by paying a lesser amount then actually what was originally due then it will be reported in the CIR. How this is reported will impact the score either positively or negatively. If it is simply reported as paid then the impact will be positive as the overdue no longer exists. However if the lender reports it as “settled” then it could lower your score. While negotiating with the lender, make sure you clarify this aspect.

Q. Does checking your own score impact in negatively?
When a financial institution asks for the CIR of an individual it is known as a hard enquiry and impacts the score negatively. However, when an individual seeks his/her report it is known as a soft enquiry and has no impact on the credit score whatsoever.

Q. What does NA or NH mean?
A score of NA or 0 means that the individual has a credit history of less than six months which is not sufficient for a credit score for 300 to 900. NH or no history means there is no credit history so obviously no rating can be provided. Score of NA/NH is not a bad thing but may cause hiccups in trying to get a loan.

Q. At what CIBIL Score can I get a loan?
As per the CIBIL website 79% of the loans get approved for a score of 750 and above. Having said that there may be some flexibility as per the rules of the lender, the kind of loan, special tie-up with corporate and so on. Banks may be willing to consider a lower score for employees of a company with they have tie-up or some co-operative banks may be willing to lend at lowers score at higher interest. While a score of 750 and above is generally considered good, there is still some room for flexibility at lower scores and sometimes a score of 750 may also not be sufficient as the applicant may be overleveraged or there may be some negative comments in the report.

Hopefully the above discussion has helped you in getting better insight into the credit process. As stated earlier the importance of this statistical tool is increasing as we move towards a more credit driven and digital economy.

Source : http://goo.gl/a7sCtz