FINANCE TIP OF THE DAY
Can you afford your loan?!
Know the quantity of loan you can afford. The banks may sanction loan based on your income but you should look at your monthly expenditure and see if you can afford the maximum that banks offer. As a thumb rule, remember not to let your credit exceed 40% of your income!
A Better credit score is expected to provide a borrower cheaper loans
A recent press report said that the most banks have set up thorough systems, including reports from credit information bureaus in order to determine the repayment capacity of a borrower. The system has been set up due to the solid rise in bad loans during the last few months.
Reports said that borrowers with a cleaner track record will get loans at lower interest rates. Mr. Anand Selva, head, consumer bank, Citi India said that the bank has decided to offer flexible interest rates to customers with long-term relationships and strong credit history.
Reports also said that the consumers can purchase their credit scores directly from firms such as Credit Information Bureau of India Ltd (CIBIL) to know their specific “credit score.” It also said that Indian Bank has offered to charge lower interest rates from those who opt for “combo” loans that bundle personal loan along with credit for a house and car.
Mr. Arun Thukral, Managing Director, Credit Information Bureau of India Ltd, said that the credit score will facilitate in making the lending process more transparent, inculcating financial discipline and enhancing consumer awareness on credit information.