4 ways eligibility impact interest rates on personal loans?

A personal loan is a financial instrument extended by banks/NBFCs to individuals and entities to fulfill any of their needs. You need not disclose the nature of the requirement or give justification of how the money has been spent. The second major aspect of Personal Loans is that they are unsecured in nature and you need not submit a collateral or guarantor to be eligible for them. These criteria make Personal Loans an extremely risky instrument of credit and Banks/NBFC’s are really careful in extending them. Here are some of the banks and NBFC's who give out Personal Loans.

But you might ask that if they are so risky then why do these financial institutions give out Personal Loans? This is because as with everything in life with higher risk the rewards are also higher. Banks/NBFCs are able to charge a higher interest rate on Personal Loans than many other investments and this factor makes them lucrative. There is a careful balance which the institutions need to tread which impacts interest rates vis-à-vis the eligibility. Click on the links to read about Interest rates on Personal Loans and Eligibility for Personal Loans. This is where a single factor can be the difference between a low rate of interest or something higher.

So what are these factors which impact rate of interest and how? Let us take a look:

-       Company you work for: This is one of the most critical factors when banks/NBFCs calculate your rate of interest. Normally all these institutions have a special classification of companies into 3 tiers. The biggest and well-known companies are grouped in tier I, the next set in tier II and so on. And institutions have standard rates, all other things being constant, across these tiers with the first group getting the lowest. So if you work for a tier I company, you have a good chance of getting a lower rate of interest. 

-       Salary: This is the second most important factor in determining if you get a low rate of interest. And the distinction is fairly obvious that the higher your salary, the lower interest rate you will be charged. In combination with a tiered company the rate can be even lower.

-       CIBIL score: the third important factor in this process is your CIBIL score. It is a rating given to you centrally based on your financial records for atleast the past 6 months. A score between 300-900 and a higher score indicates a clean record of loan and card payments which ensure you get a lower interest rate. To learn more about CIBIL scores and how they are awarded visit this site.

-       Current EMIs: the final factor which impacts interest rates and also approval is the existence of current EMIs or overdue card payments. If you have these, you need to demonstrate the capability to pay off a new loan. And even if you do, the banks might still charge a higher rate because it is risky to extend a loan in such a case. Click on this link for a blog on what to do to get a loan with a bad credit history.

So take note of these factors before you apply for a loan and if in doubt visit a loan aggregator site which can calculate your eligibility and also your expected EMIs. So whether you are in Pune, Hyderabad, Lucknow, Kochi or Ahmedabad you can always check on these rules and click on the city name to know more about getting a Personal Loan in your city.

Difference between Renovation Loans and Interest Free EMIs

This is a classic case which first needs introduction and then a frank laying down of facts whether you are in Delhi, Kolkata or Chennai. While there is no right or wrong options and cases might differ between different goods, it is always good to know the logic behind each and judge for ourselves which is the best one.

We are a consumerist society and each trend and fashion impels us to make purchases which makes our lives comfortable and luxurious. Be it a new TV, bigger TV, intelligent fridge, washing machine, home theatre or all of these together. Disposable incomes have never been higher and this is what fuels the economy of the country. For manufacturers to produce, retailers to sell and consumers to purchase. The circle goes on…

While we all have disposable incomes, we might not be able to spend big amounts at a single go. Read a good article on this called 'the financial implications of making my house...my way'. But we are confident that we can afford a brand if there was external help. We can easily pay off a loan and the lending and borrowing of money is one of the pillars of our financial economy. Ergo banks have made it easier for consumers to finance their purchases through Renovation Loans. Apply for one here. These loans are unsecured debts which banks advance based on a person’s financial eligibility. A person with a good credit record and ability to pay back can have easy and instant access to Renovation Loan. What is more they can also get a good rate of interest. Learn more about low interest rate here!!

The other option extended by banks and financial institutions directly through the retailer is something called interest free EMIs. So when you buy a product you have the option of giving PDC’s to the retailer for a certain tenure to pay the price of the product in EMIs. This is a fixed EMI amounting to something more than the MRP of the product.

Now for comparison we need to know that most retailers are asked to pay a 7% charge by the institution they are working with to extend an interest free EMI facility. This is added directly to the price of the product you are buying as the retailer does not want it to affect his profits. This is lower than the interest rate on a Renovation Loan but you have to consider that this is a flat rate which actually amounts to 12% on a normal rule of diminishing principal.

If we add another factor and say that another retailer is offering the same product at a 10% discount but only on full payment the equation becomes complicated. Taking a Renovation Loan at a 16% interest rate on 90% of the MRP as compared to taking an EMI for 112% of the MRP. Think about it and visit an aggregation site to know your best deal via Renovation Loans.

How can I travel the world on limited finances?

All humans started as nomads and there is a travel bug affecting each one of us. Some are so severely affected by it that normal life seems mundane and boring. They have to get out every once in a while and see the world. That is what keeps the engine running. But the problem of finance keeps most of these birds tied down. While the itch to visit different countries is ever fresh, rustling up the money to fund these trips brings them down. More so if it is a young person making his/her way in their careers.

For these dreamers, the first roadblock comes when they have to take time off work. If this is crossed, they still have to think about where the money will come from. Even if they have the money, most will think twice before spending a big amount at once. So it is with many such avid travel seekers. It may be a cliche but you only live once so it need not be this way. 

The world has moved on and our shifting out of our mental blocks might help you take that bi-yearly trip. Be it watching cricket in Australia, trekking the Serengeti or window shopping in Paris. All these should be possible if you first, are willing to budget properly and two if you are willing to take a minor overhead. Our thinking has moved on and we are willing to travel alone, backpack etc but what is more important that our attitude towards money shifts. We have all seen and read about how people from different countries and even ours take time out to travel the world. They can do this because travel is their priority and everything else can be taken care of.

Our financial institutions these days are willing to lend money for travel to eligible applicants in the form of low interest Travel Loans. These loans, post approval, can be used for any purpose be it for the cost of tickets or for expenses on tour. And you can easily pay them down in a tenure of your choosing. If you get a raise you can also pre-close the loan and apply for another one again. So do not despair if you don’t have the money to travel now. You can still do it.

You can go to any bank and apply for a travel loan but it is not really advisable. The better idea is to go to an aggregation site like this and check for the best option from among the offers of different banks. You can enter your personal details, financial details and requirement on the site and it will give you the best option based on the company you work in, salary, bank account and other details. This way you can be assured of getting the lowest rate of interest possible that will make your travel dreams come true.

Marriages- Made in Heaven, Financed on Earth through Marriage Loans

Marriage, an occasion of fun and festivities, a time when relatives and friends come together to celebrate a joyous occasion in the lives of two individuals embarking on a lifelong journey. Marriages and weddings have always been a grand affair in India. We consider marriages to be a sacred union of two souls and so we leave no stone unturned in making them an event of a lifetime. We want to ensure that everything is perfect and the occasion stands out in the minds of all invitees.

If you are about to get married or if the happy occasion is coming up in the life of your child, we are sure you must be in a phase of hectic planning. First you have the choice of outsourcing the marriage to a wedding planner or organizing the entire thing yourself. While the former choice does involve less leg work, the important decisions still have to be taken. In either case you will still have to take a call on the number of guests, venue, decorations, food and entertainment. In short, you have to fix on a budget for the wedding.

It is really critical, this decision on a budget. While you want the occasion to be memorable, there is a constraint on how much you can spend as a lump sum. Many couples and parents baulk at spending a lot at once. Some do manage to spend a tidy sum and get the wedding of their dreams but forget to account for after-wedding expenses like a honeymoon or moving in together. Couples and parents fail to realize that budgeting for a wedding is not about spending for a 2 or 3 day event but about setting up a lifetime.

So when you plan ensure that you look at an optimum scenario. First, look at what it will cost to stage a wedding of your dreams with all the guests you want, ceremonies required, ideal venue and the best food and entertainment. Along with this, add costs of after parties, religious travel/ceremonies required etc. Next, calculate the cost of going on an ideal honeymoon to a destination of your choice according to a level of luxury you expect. Finally add the critical costs of moving in together which is something that escapes the notice of most couples and their parents. We are sure that all of these might be substantial and you would not want to compromise on either expense. The second scenario might be that you have the money to cover both but do not want spend all of it at a single go. What do you do?

Marriage loans which is a part of Personal Loans is the simple answer. All major banks and financial institutions are now happy to lend you a personal loan to cover expenses incurred for a marriage. So if you consider the entire expense to be X and you are willing to spend Y, you can still have an ideal wedding by borrowing X-Y from a bank. In fact it might make more sense to fund some of these expenses through a loan, even if you have the money, instead of spending all your cash in hand.

Who and how can I avail of such a loan? Well, any salaried individual working in a known organization with a minimum of 3 years’ service and Rs. 18,000 salary with age between 21-60 years can avail a marriage loan. Infact it is easier to go for a joint loan with your would be spouse or along with a parent. In the case of self-employed professionals, it includes all these along with ITR statements from the last 3 years with a minimum profit of 2 lakhs. If you are a parent and are now retired, you can still avail a personal/marriage loan against your pension, upto an age limit of 70 and an amount of 5 lakhs.

What are the most important factors I should think of before taking a marriage loan? It is really important that you consider these two factors before taking a marriage loan. One, your capacity to repay which means that you must be able to afford the EMIs. Now, it is easy to find out your EMI with nifty tools at your disposal. An EMI Calculator can help you find out the EMI for a specific loan amount and tenure if you enter your financial specifications. You can work around with the loan amount and tenure to find out the specific EMI you can afford. This can help you decide on a marriage/after-marriage budget and find out how much you can spend.

The second important factor is the rate of interest which depends on the bank you borrow from. You cannot assume that a specific bank which holds your account will give you the best offer in terms of principal, rate of interest and tenure. You must shop around and look at the terms offered by all the banks in the market. Another bank might give you a better deal based on the company you work for or your CIBIL score. So we advise you not to take any deal from a call center but check with an aggregator site like Cashkumar to not just compare banks but also get free telephonic consultation by loan experts as well as doorstep service to process documentation.

Finally it’s fair to say that matches are indeed made in heaven but they are solemnized on earth and money should never figure as the factor which decides how you celebrate it. This wedding season, take your time to budget for the wedding and your life after. And be sure that there is always help available if financial factors impede the union of you or your children.