News Grow: Personal Loan

Showing posts with label Personal Loan. Show all posts

Tuesday, April 17, 2012

Long Duration of Credit History is Better

10:48 PM UP Sarkari Result No comments

When it comes to trust, then, you would like to trust a 5 years old friend more than 3 months old one. Same funda applies in case of credit history too. Longer credit history will result better. This credit history must be clean for that much long time. This will help you in improving your credit score as well.

If you are paying your payments or scheduled emi (equated monthly installment) for all loans on time from last 5 years, it’s very much a proof that you pay on time. Due to this, you will be having a good history and track record. An individual has a good history from last 5 months, then, it will not be considered that strong comparatively. So higher the duration of good payment history, the better your score will be.

If you do not have a credit card, there is a good reason why you should get one now. In addition to this, you should do your payments with credit card and pay in full every month, so that your payment history is built with positive effect. In this way, your credit score will stay in good books of cibil. On the basis of good credit rating, you can avail better rates on personal loan and so on. You will be getting instant approval for any type of loan or card.

Not only this, your excellent credit rating will also bring few of extra perks coupled with your loan offer or the credit card you have chosen to apply. Before applying for any of this product, you can easily check your available offer and pick according to your choice and suitability.

You should understand the importance of credit history by now. If you have good credit history, wide range of financial solutions will be offered to you. If the case is vice versa then variety of options will be in squeezed form for you.

Gold Loans – Quick Funds At Lower Interest Rates

4:07 AM Joy No comments

Many leading gold loan providers in India are now offering discounted rates along with other additional benefits. One can now avail a loan up to Rs 1 crore against gold. They are also offering loan amounts ranging from Rs 1,305 – 2,025 per gram of gold.

Evidently rates offered by gold loans are far cheaper than a personal loan. Let’s compare the interest rates of a personal loan with a gold loan.

	Personal loan	Gold Loan
Interest Rates	14.25-19%	12-24% (depending on gold value)
Added Fees	Processing fees of 2-3%	No processing fees
Added fees	2-3% pre payment charges	No pre payment charges
Maximum loan	Rs 50 L	Rs 1 Cr.
Maximum Tenure	7 years	1 year

Opting for a gold loan instead of a personal loan is fast becoming a norm for both urban and rural India. In fact the social stigma attached to gold loans has almost diminished and they are widely recognised as acceptable means of raising funds for meeting urgent money requirements.

Providing a collateral security in the form of gold, property and even shares/debentures help in decreasing the interest rates. In case of a default, when the borrower fails to repay the loan on time the lender has an option of confiscating the security provided. Otherwise a personal loan which is an unsecured loan attracts a high interest rate as the borrower doesn’t provide any security to the lender.

Contrary to a personal loan where the bank offers a fixed interest rate, gold loan rates are hugely dependant on the safety margin you leave for the lender. That is, if you are pledging more jewellery for the same loan amount then interest rates will be conclusively lower. Thus, depending on net weight and the purity of gold interest rates vary from 10 to 17%.

Each bank has its own method to calculate the value of jewellery pledged. Some banks fix the consideration price at a level (e.g. Rs 1,000-1,200 per gram) for a period of 6 months and revise only after a year irrespective of the market value. While others take an average of two weeks’ market value and then accordingly value of the jewellery amount is decided. Some look at the daily movement of the gold price in international value and offer a loan.

The best thing about a gold loan and other secured loans is that irrespective of your credit history you can avail a loan by providing a security belonging to a third party which may include your parents, spouse, siblings and even friends.

Another advantage of a gold loan is that it is the easiest and the quickest option available. Without much paper work involved one can easily get a loan in a few minutes. The only document required for a gold loan is personal identification proof. No other document is necessary.

Thus, in case of a medical emergency where instant cash is required, one can enjoy the benefit of a hassle free expeditious disbursement of loan. More and more people are now opting for such loans whose tenure is not more than 1-2 years to finance their children’s education, buying a car or even to pay down payment for a home purchase.

The repayment of the loan can be structured between the interest amount and the principal amount. Through this means the principal can be paid at the end of the loan period in a lump sum and the interest amount can be repaid in form of an EMI in regular intervals.

For example, if you took a gold loan for Rs 2 lakhs for 2 years at 12%, then monthly you would be required to pay Rs 2,000 for 2 years. But apart from paying this 2,000 every month you will have to pay back the lump sum principal value of Rs 2 lakhs at the end of 2 years. Whereas the EMI for a personal loan of Rs 2 lakhs for 2 years at 12% interest rate would be Rs 9,400 and there won’t be any option for paying a lump sum money at the end of your tenure.

There are a few pointers to keep in mind before settling down on a specific bank or NBFC for a gold loan. Check the interest rate being offered by the lender, it should be lower than a personal loan being provided by it. Taking a loan from an NBFC is considered far costlier than a bank, some of them extending it to 33.6%. So always check in a public sector or a private sector bank for gold loan at a reasonable rate.

In fact if you can restrict your loan amount to around 50% of the market value of the jewellery then you will get reasonable interest rates.

As interest rates vary according to the quality of gold, rates would be lower on hallmarked jewellery. Banks prefer jewellery instead of gold coins while providing loans as the customer has emotional value attached to the jewellery being pledged.

Required Document And Eligibility For Personal Loan In India

3:32 AM Joy No comments

A Personal Loan, as the name suggests is a loan taken to meet personal financial needs. It can be a marriage in the family, a house renovation, buying jewellery for your wife or paying for your vacation trip. These are the moments you may be looking for some urgent need for money, and which can be met by taking a Personal loan.

Usually the procedure of Approval of personal loans are quick and a loan is approved with simple documentation.

Advantages of personal loans are Speedy Approval, flexibility to choose your loan amount ranging from 10000 to 10,00,000, Repayment period from 12 to 48 as per your interest, No need of collateral/security/guarantor.

When it comes to Loans in India, we have a number of banks dealing with personal loans, giving attractive interest rates and competitive services. So it is always advisable for anyone to do a Loan Research before actually proceeding with a loan option from a Lender.

Eligibility Criteria For Taking A Personal Loan

Documents	Salaried Individuals
Identity proof	Passport or voter's card or driving licence or PAN card and photograph
Income proof	Latest salary slip showing all deductions or Form 16 along with current dated salary certificate or ITR (last 2 years)
Residence proof	Bank Account Statement/ Latest Electricity Bill/ Latest Telephone Bill/ Latest Credit Card Bill/ Employers letter certifying current mailing address/Passport(Valid)- provided the passport address is present address mentioned in application form / Existing Registered House Lease
Proof of telephone	Latest bill of landline or mobile or WLL stating name of borrower or address of borrower
Guarantor	Optional

Qualification or registration proof required for doctors, architects, CA, CS, ICWA, MBA consultant, engineers
Documentary proofs required may vary from customer to customer