Category Archives: Personal Loan

25 Oct

Eligibility to Qualify for a Personal Loan: Discover Lenders

Generally, people who apply for a personal loan encounter financial difficulty and do not benefit from the necessary money to fulfill certain obligations or they want to transform into reality old projects like starting a family business. However, in order to proceed with the application, they have to assess their eligibility and put things in order because when it comes to giving a loan, most lenders initiate a detailed research concerning the borrower’s background, personal and additional information. This helps them determine if the person is trustworthy and has the possibility to repay the loan otherwise, they will be taking a loss. Credit rating, employment history and repayment history, current financial situation, collateral and other eligibility considerations matter significantly in front of any lender so if you know that you do not meet one of the requirements you should rethink your application or find and approach other lenders that might accept you as an eligible candidate.

Credit Score
Logically, an excellent credit score will undoubtedly facilitate the process of receiving your much-desired loan and you can also beneficiate from a lower interest rate while poor credit will narrow your options drastically, if not even ruining any chance of getting a personal loan in the first place. If you have a credit score above 800, lenders will practically compete in providing you options meaning that you afford to be selective. A credit score below 700 is acceptable because you can apply for a loan, but you will no longer have the opportunity to choose a lender. With approximately 600 you will have a hard time finding someone who will approve a loan and with 500 you should kiss your loan goodbye or start improving your credit score.

Employment and Repayment History
Employment stability represents the second requirement that lenders impose because they have to make sure that you are a stable employee and that you do not have the habit to change jobs frequently in order to exude reliability. This does not mean that you have to work for the same company years in a row, but to remain in the same field. If you are self-employed then lenders might require further information in order to evaluate your income and reliability. Repayment history refers to the way you handled debts in the past. Lenders are able to see if you have unpaid debts by checking your credit score and this will definitely affect your eligibility. If you want to avoid causing a negative impact, you can erase late payments from your history by writing a letter to your creditors.

Income Information
Apart from establishing if you are a reliable employee, lenders must assess your monthly income in order to decide if you are able to repay the loan. Therefore, they might demand contact details of your employer or employers in the past. If you do not know exactly how much you make and spend each month, then you should start calculating the numbers and see if you afford the rate. The lenders can require additional information or proof concerning your income, such as utility bills or current bank statements.

Source: valuewalk

13 Oct

Home loans, Personal loans may soon be based on market rates

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Those who avail of home loans and personal loans could soon be on par with the big corporate when it comes to how banks calculate interest charges on borrowers. Interest rates on loans across the board would soon be bench-marked to external market rates as the banking regulator aims to put an end to opacity of loan pricing by banks.

Click here: Check your personal loan eligibility and apply online.

A Reserve Bank of India committee headed by Dr Janak Raj has suggested that interest rate on loans be pegged to anyone of the three benchmark rates such as T-bill, certificate of deposit rate or the RBI’s repo rate rather than leaving it to the discretion of each bank. It also suggested a ban on banks charging a conversion fee whenever the bank resets the rate of interest.

“Arbitrariness in calculating the base rate and MCLR and spreads charged over them has undermined the integrity of the interest rate setting process,” RBI said in a statement. “The base rate and MCLR regime is also not in sync with global practices on pricing of bank loans.”

Banks and the RBI have been at loggerheads for over a decade with the regulator publicly stating that banks move in terest rate in such a way that it benefits them.

Banks have been quick to raise in terest rates when the RBI raised policy rates, but were slow to cut when RBI did so.

“We think the internal benchmarks like the base rate or the MCLR, based on data, seem to give banks a very high amount of discretion lot of factors that are flexible for them to ensure that lending rates can be kept high even when monetary policy rates are going down an accommodative path,” deputy governor Viral Acharya told reporters.

Data from the RBI shows that, between December 2014 and October 2016, a month before the demonetisation of Rs 500 and Rs 1,000 notes, banks’ Base Rate on an average reduced 0.61 per cent when the policy rate was lowered by 1.75 percentage point.

“Banks were slow to pass on the reduction in their MCLRs in January 2017 to their actual lending rates,” said the report. “Of the 12 banks whose spreads widened, six banks took up to six months to pass on the benefit of lower MCLRs to their lending rates; the remaining six banks passed on the benefit of their lower MCLRs, but only partially even after six months. This is intriguing as changes in MCLRs are expected to be passed on to at least fresh borrowers immediately.”

The report also suggested that interest rates resets which are now set at annual frequency creating potentially a one year lag in transmission that these be changed on floating rate loans to quarterly resets.

This is done to ensure that the transmission will be much faster.As on now, banks have adopted marginal cost of lending rate formula where rates are linked to cost of their funds and are reset in different internals such as one month, six months to one year.

“The Study Group is of the view that the decision on the spread over the external benchmark should be left to the commercial judgment of banks,” the report said. “However, the spread fixed at the time of sanction of loans to all borrowers, including corporate, should remain fixed all through the term of the loan, unless there is a clear credit event necessitating a change in the spread.”

Originally Published in economictimes.indiatimes.com

21 Jul

Personal Loan Services from Finheal

A personal loan can help you meet sudden expenses such as school or college fees, dream vacations, wedding expenditure, and home renovation projects or even for the purchase of consumer durable. Applying for a personal loan is a lot easier, quick, and convenient with Finheal. A Personal Loans is a great way for handling your financial needs and acts as an assets in putting your plans into actions. When expenses arise, like buying your first dream vehicle, your smartphone, your child’s marriage, furnishing your home, higher education for your kids or a family holiday, just go through our website and let us help you turn your personal as well as commercial dreams into reality.

With Finheal a broad range of Personal loans, meet all sorts of financial needs without bothering about holding any collateral or property. Our array of personal loans are simple and can be changed according to your requirements and are designed with your changing needs in mind. Just follow a few simple procedures to help our team understand your needs.

Personal Loan Features & Benefits

Presenting Finheal home loan solutions, now you don’t have to wait to fulfill your dreams. Be it renewing your home or going to your dream vacation or buying for someone special that coveted gift, Finheal cares most to make it happen.

Fulfill all your financial needs with our hassle free online Personal Loan, which are designed to help you live life to the fullest.

Obtain a personal loan quickly with easy documentation, quick processing, and fast disbursal.

Enjoy the convenience of doorstep service

Pick a loan tenure as per your comfort ranging from 1 to 5 years

You need not worry about collaterals or guarantors

Get rid of your high-interest debt through ‘Balance Transfer Option.

Get the best in class personal loan interest rates

Choose a convenient repayment option from, Private or Public Bank a/c debit or ECS from your other.

We understand that the reasons for getting a personal loan can be numerous and varied. To cater to your specific requirements, IndusInd Bank offers you tailor-made personal loans in multiple categories. These are as follows:

PL for Medical Expenses
PL for Home Renovation
PL for Education
PL for Wedding
Personal Loan for Tours and Travels

You can also opt for a personal loan online and get instant solution to all your immediate financial needs. Browse our website to know more about how to get a PL in the most hassle-free manner.

07 Feb

Personal Loan: Fallacy to be Avoided when Applying

Apply for Personal Loan with Finheal.com

Personal loans can be taken for any reason and usually getting a personal loan is not too hard or awkward, but that does not denote that you can be informal when applying for them.

Focusing only on Interest Rates: While interest rates are unstated to be the most important feature in any loan one cannot disregard other aspects too. When comparing loans or considering options look at aspects like processing fee, tenure for which loan is offered, pre-payment clause, late payment and other charges, turnaround time, eligibility criteria, etc.

Not Comparing Enough: Today there is a surplus of financial institutions offering all types loans. While bearing in mind all options is not possible or practical one does need to compare between a few options to get a contract that is most feasible. There are online portals obtainable that let the applicant compare not only personal loan interest rates in India offered by various Financial Institutions (FIs) but also list out comparisons based on your exact necessities so that you can evaluate other loan aspects too.

Not accepting all aspects Before Signing the Dotted Line: While the FI representative will like to make things easier for you by just marking the places where you require signing but that’s not the way to go about it. Before signing the dotted lines read the fine print and appreciate it. Once you sign the papers, whether you have unstated all that was written in the loan agreement or not you are vault by the terms and conditions.

Borrowing More than You Can Handle: Unlike many loans, there is no LTV (loan to value) ratio for a personal loan; so you can take a loan as high as your eligibility criteria. However forever bear in mind that a loan is a legal responsibility that desires to be repaid timely. Though the lender will think various aspects before sanctioning a loan, you as an applicant are more aware of your liabilities and financial condition. Do not borrow more than you can handle.

Not looking for option Sources of Funding: Though applying for a personal loan is easy; these loans are comprehensive at high rates. Before you apply for a personal loan do think other sources of personal finance. These sources make more sense in the conditions when the applicant has a low credit score or is looking for a tenure that does not fit within the personal loan range. The alternative sources might be accessed at lesser interest rates also; the options that can be considered are loans against fixed deposit/shares and securities/ property/gold/insurance policy, loan from employer or borrow from PF (Provident Fund)?

Borrow sensibly and avoid the above mentioned mistakes so that you do not be sorry your decision.

02 Feb

How to Estimate EMI on Personal Loan?

Finheal
Personal Loan
Tags: EMI, finheal, finheal.com, Personal Loan, personal loan interest rate
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Suppose that due to some urgent necessity, you borrow Rs 3 lacs from the bank. The personal loan interest rate in your case is 15% and you are paying an equated monthly installment (EMI) of Rs 10,400 per month for a period of 3 years. Whether this amount is correct or not, how much interest is being paid every month, how much principal is being repay every month are some questions, for which you don’t have answers.

So it is in your benefit to understand how banks estimate your loan EMIs.

Personal Loan EMI Calculator – Finheal

As you already know, equated monthly installment (EMI) is a fixed monthly amount that you require to pay every month till the loan is cleared off. The biggest benefit of EMI is that you know accurately how much you require paying every month. This helps in good planning of your personal finances in advance.

Now the EMI calculations depend on following 3 factors:
Loan Amount
Interest Rate
Loan Tenure

There are several personal loan EMI calculators available online that you can use to calculate you’re EMIs. Or you can even use a simple formula in MS Excel software.

The function that needs to be used in Excel is PMT. The formula specific to personal loan EMI calculation is as follows:

= PMT [(Annual Interest Rate)/12, Number of EMIs, Loan Amount]

So for instance, the EMI for a principal amount for Rs 3 lacs borrowed at 15% interest for 3 years (36 months) is Rs 10,400.

Now each EMI includes contributions towards both principal and interest on the loan amount. To know more about each part, what is required is a Loan Amortization Schedule. It is a tabular representation of loan repayment schedule along with all details like break up between the interest and principal component of each EMI. One quick look at the agenda tells exactly how the loan is being repaid and how much is the exact exceptional left to be paid.

In the initial stages of the loan, the interest part forms the main portion of the EMI. But as you progress along, the portion of interest repayments reduce and principal repayment increases.

Since we are talking about Personal Loan, it is significant to note that personal loans interest rates are usually fixed. So the EMI payment remains constant throughout the tenure. In case of floating rate loans, the EMI payments also differ with change in rates.

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