Tips to get out of a debt trap
Getting out of a debt trap can be a difficult task. Once you default on a loan, it becomes difficult to get cheaper loans and as a result, the interest rates keep piling up. However, there are ways which can help you get out of certain sticky situations. The first step that you should follow is to pay off the high-cost loans first. Such loans include credit cards bills, personal loans, etc. Credits card interest rates can go up to 40 per cent and investments like mutual funds do not generate such high returns to cover it. Therefore, you can cash out of such investments.
Taking help from family is another option you can utilise. Reach out to family members or close friends to obtain interest-free loans from them. The next step should be to consolidate all the existing loans and leveraging your assets to take a new loan. You can pay-off the high paying loans using the new loan. It is advisable to take a long-term loan as the shorter ones come with higher interest rates. Your credit score might be low but you can still avail loans from some NBFCs who provide loans based on repayment capacity. You can negotiate with such lenders to get reasonable interest rates and lower your interest burden.
Long-term solutions to get out of debt-trap include cutting down on expenses like taking the bus instead of a car, avoiding expensive purchases etc. These measures might be small but they will have a big impact on finances. Increasing income is another aspect that will help you in the long run, for instance, the non-working partner can take up part-time jobs.
25 March 2019
Money saving tips for the end of the financial year by taking a loan
Most companies provide their employees with bonuses toward the end of March each year. The main reason for this is that the balance sheets of companies close for the fiscal year around this time, and companies round up bonuses, variables and incentives to employees. The bonuses can come in handy for employees, especially for those who want to make investments. The bonuses can be used to invest in anything from a house or car to travel. However, the bonus you receive from your company alone may not suffice for investment. In this case, you need to first figure out what type of investment you want to make, and be certain that you will be getting the kind of returns you expect from said investment. So in case you choose to take a loan for investment purposes, you need to ensure that the rate of return you get from the investment is more than the interest rate of the loan you are taking. You must also ensure the credibility and safety of the investment before making it.
21 March 2019
Tips for getting a personal loan at a low interest rate
In case of any financial emergencies, low-interest personal loans can help in reducing the burden. A personal loan is a form of an unsecured loan that most individuals can apply easily. However, the interest rates of personal loans might be quite high since no security or collateral is required. Given below are some tips to get a personal loan at a low interest rate:
Credit score: Maintaining a credit score of above 750 is vital when applying for a personal loan. According to lenders, having a good credit score makes the individual financially credible. Therefore, they offer personal loans with a lower interest rate.
Compare: It is important that you compare various lenders before applying for a personal loan. There are various third-party websites available where lenders can be compared. Different lenders may offer personal loans for the same amount but at different interest rates.
Processing fees and hidden costs: It is vital to check that there are no hidden charges levied when applying for a personal loan. Lenders may offer low-interest personal loans but may charge a high processing fee. Therefore, it is vital to check through all the details before availing a personal loan.
Seasonal offers: Lenders inform customers via email or SMS if there any special offers on personal loans. Check through such offers as you would be able to get a personal loan that is affordable. Personal loans with a low interest rate are also offered at certain times. Such discounts are usually available during festive seasons when you apply for a personal loan online.
20 March 2019
All About SBI Top Up Loans
The wedding season has kicked off in India and the enthusiasm among people can be seen very evidently. Weddings are one of the costliest affairs among all life events. Organising a wedding can be a pretty tedious job, along with it being an extremely costly affair. Weddings can essentially drain you off all your life savings, depending on the kind of wedding you are organising. For someone who has extreme shortage of funds, this ultimately means a huge deal. Therefore, people often get into the habit of borrowing from their relatives or banks during weddings or engagement ceremonies. Borrowing money from relatives can seem like quite a safe deal as you are free to give the amount back to them without having to pay an interest.
However, the financial assistance available with others is a major factor playing a role here. Therefore, it is a good idea to more often than not borrow money from banks and financial institutions. Interestingly, one of the largest public sector bank in India – State Bank of India (SBI) is offering its customers a kind of loan known as top up loans. This is the kind of loan that can essentially be borrowed by any individual for a specific purpose. However, you have to keep in mind that a top up loan can only be borrowed by someone who already has a home loan from SBI.
19 March 2019
Personal Loan Eligibility and Other Details
People in India are quite familiar with the easy availability and huge benefits that come from personal loan. Personal loans are borrowed by individuals during a time of financial crunch or assistance. It is usually borrowed when you are constructing a new house, or moving to a new city, or financing your child’s education. Personal loans are widely popular in the market and people typically incline towards such loans because they require minimal documentation and are disbursed relatively quickly.
The loan amount that you are taking will depend on your needs and requirements and hence the amount will differ from another person taking a personal loan for an entirely different purpose. This means that you are free to choose the amount of loan you want to borrow and the loan giver (bank or financial institution) will ask for minimum documentation in this regard. Before borrowing a personal loan, it is important to check your eligibility along with other details.
Eligibility Criteria – The individual applying for the personal loan should either be a salaried professional or a self-employed individual. If you working for an MNC, or have a Government job, or are working in a private firm, you will be eligible to borrow a personal loan.
Age – The minimum age at which you can borrow a loan is 21 years and the upper age limit for a personal can go up to 60 years of age, at the time of loan maturity.
Credit score – The loan applicant’s credit score is measured before the loan is offered to him/her. A healthy credit score means the individual will be able to repay the loan back on time.
14 March 2019
Important things to consider when taking a personal loan
Most banks and financial institutions lend loans to salaried individuals, however, certain banks offer personal loans to self-employed applicants as well. Self-employed individuals are required to meet certain criteria when applying for a personal loan. Here are some important factors you should consider when applying for a personal loan as a self-employed applicant.
Banks look for a regular source of income. Therefore, you might be required to share your bank statement for the last 6 to 12 months. The approved loan amount will depend on your income level. Therefore, it is important to ensure that you have a steady flow of income. Certain lenders might also determine the stability of your business.
Some self-employed applicants might have higher income levels than salaried individuals, but the credit score is also essential in the loan approval process. Make sure that you have a good credit score as your application might be rejected despite the higher income levels.
To obtain a personal loan as a self-employed individual, you must be at least 21 years old. Some banks might also have an age limitation of at least 23 years to qualify for a personal loan. It is advisable to check the age criteria before applying.
13 March 2019
Personal loans as an aid in debt consolidation
Whether a debt is a high-interest one or a low-interest one, repaying it has many advantages. It will help in better financial management as well as in leading a stress-free life. One of the ways in which you can pay off your debts is through debt consolidation. When you consolidate your debts, you can pay off all your debts and have just one loan in hand to pay off. High-interest debts, either loans or credit cards, could be consolidated into a low-interest loan or credit card. Instead of tracking many different bills and due dates, with debt consolidation there is only one bill and one due date to track. Personal loans are one of the best ways to consolidate your debt. This is because personal loans are unsecured loans and they have a fixed interest rate that will typically be on the lower side, with a fixed repayment tenure. This helps you manage your finances better since there is a fixed amount to pay every month for a fixed period of time. It is ideal for those who want to avoid using credit to pay off their debts as well as those who have debt that will take several years to pay off.
12 March 2019
NBFC-P2P certification received by Lendbox
The Reserve Bank of India (RBI) has issued the Non-banking Financial Company (NBFC)-Peer-to-Peer (P2P) certificate to Lendbox. The P2P lending platform began its operations in November 2015 and is based in Delhi. The company will follow the RBI guidelines that were set in October 2017 for non-banking institutions that are into Peer to Peer lending.
Lendbox is one of the country’s largest P2P platforms with Rs.40,000 crore as its loan book size. The platform has almost 200,000 users and recently raised Rs.6 crore from VC Ivy Cap Ventures. As per RBI, every individual investor across all P2P platforms can have a maximum investment of Rs.10 lakh. It is also mandatory for these platforms to have Rs.2 crore as the minimum net owned funds for operations to continue. Borrowers and lenders can transact on the platform after accepting terms mutually. The worthiness of the borrowers to pay back the money is assessed by Lendbox’s own tech-based proprietary algorithm. Transfer of money is also possible via the platform’s escrow accounts. P2P Lending helps in the removal of middlemen between lenders and borrowers. Borrowers can get loans at a lower cost and lenders can get high returns on their investment.
7 March 2019
How do lenders determine the eligibility of an individual for personal loans?
Personal loans are unsecured loans and thus the risk factor on the part of the lenders is higher. There are a number of parameters on the basis of which the approval of a personal loan is dependent. The lenders tend to approve loans for borrowers with less risk factors. This consists of parameters such ass checking the credit history of the applicant, his or her loan repayment pattern, and so on. The following factors are considered for checking the eligibility of an applicant:
1) Employment of the applicant is the probably one of the most important factors. Whether you are salaried or self-employed, lenders prefer offering loans to individuals with a regular and stable source of income; 2) Having a good credit score is the also an important parameter based on which the approval of your personal loan will be done. The higher your credit score is, the better are the chances of your application being approved; 3) Your credit repayment history will also have an effect in this case. If you have maintained a good credit history in the past and have made payments towards your credit card bills and EMIs on time, the chances of a loan application being approved goes up; 4) Your age will also play a vital role in this regard. Usually, lenders have a minimum requirement of 23 years to 55 years for the applicants. Although the chances of getting a loan for an individual with no credit history is lower, he or she can apply for a loan and get it approved through a fintech lender; 5) The income of the applicant should be at least Rs.18,000 as per the requirement of most lenders.
5 March 2019
Personal Loan – Is Online Application the way to go?
Thanks to advancements in technology, you can now purchase almost anything online from the comfort of your home instead of going out and wasting time and energy on the same. Personal loans too can be availed online with relative ease, and there are plenty of benefits of taking a personal loan online. The first of which is the number of easy options available to you. Third party sites offer a thorough comparison of various personal loan options that make it easy for customers to sort and compare and choose one that best fits their personal finance needs. Not only is there a lot of convenience in taking a personal loan online, but the turnaround time for online applications is also pretty quick. Once you send your application and submit the documents required electronically, it takes only a matter of hours for the loan amount to be disbursed to your bank account. It is essential to compare as many options as possible and look for the interest rates, processing fees, flexibility of tenures, etc. in order to make a calculated decision.
4 March 2019