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30 Jan

Identify overhead charges while Applying for Personal Loan

Finheal
Personal Loan
Tags: EMI, foreclosure fee, loan registration, personal loan agreement, processing fees
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Apply for a Personal Loan Online Even if you have Bad Credit

Personal Loans hold up your monetary needs at times when you need it most, such as, a wedding, a vacation, a medical demand or any other personal need. As personal loans are unsecured loans, they take a high rate of interest. They also engage a range of charges and fees that are charged by the bank/financial institution and are mentioned in your loan agreement, but these fees and charges are often overlooked. Here are some of the overhead charges that you must make known yourself with:

Loan Processing Fees –Processing fees or a loan application fee is a charge made to you by a bank for processing your loan application. This fee is typically charged in order to cover the administrative costs of the bank, any credit score checks done for you in relation to your loan application, in the middle of others. Processing fees are a standard fee that is charged by most banks and financial institutions. However, some banks often waive processing fees for highly entitled customers are valued clients as a goodwill gesticulation and also to attract customers. The lower the processing fee, the better benefit you have towards savings on your loan application fees.
Advance Prepayment Charges –Prepayment is when a borrower pays off full or fractional loan due before the loan closure date. Some banks allow advance prepayment though they levy a penalty on it that is charged moreover charged to you at a flat rate or a cumulative interest. The actual charges differ from each bank and are resolute according to their internal bank policies. You can also ask your bank for that information earlier or you will find that information specially mention in your personal loan agreement. Some banks offer advance prepayment only after a certain time frame to make sure they capitalize on the interest earned every month in the initial EMIs of the loan. Banks such as Standard Chartered, Citi, Kotak, ICICI, Tata Capital, HDFC, AXIS, IndusInd, SBI, etc. offer advance part payment facility.
Foreclosure Charges –Some banks allow foreclosure of a loan, provided the full payment is made. However, they charge a foreclosure fee for approving a foreclosure. While some banks allow no penalty on foreclosure, it is best to make sure with your bank on their loan foreclosure policy. Some banks and independent financial institutions also offer a foreclosure calculator that you can use to estimate the total amount you will have to pay if you choose to foreclose a loan.
Defaulter Charges –In case you miss any EMI or pay the EMI late, the bank charges a penalty for that which is also known as defaulter charges. Default charges often contain the EMI amount, additional interest and collection costs to avoid any penalty. Such charges are subject to the bank’s internal policy and you will find this information in your loan agreement or at the bank’s website.
Document Charges – Document charges are stamp duty and loan registration fees that are charged by banks to process and disburse your personal loan application. Document charges keep changing according to the loan amount and are strong-minded independently as applicable to the individual. Some banks often waive off document charges to attract borrowers.
Hidden Charges – It often happens that you have provided exact loan details such as loan amount, tenure and rate of interest. However, to make you alert of any hidden fees and charges is also crucial. If the bank upfront has not disclosed any hidden charges, look for them in your personal loan agreement as that is a binding legal agreement between you and the bank and will have the full charge disclosure. This is the reason why you must always read the loan agreement and its terms and conditions thoroughly before you sign.

Finheal is a financial website that allows you to not only check your personal loan eligibility, but also apply for personal loan directly at their website. So go ahead and find the best personal loan deals, all at one place, only at Finheal!

28 Jan

Why Is Everyone Talking About Refinancing the Home Loan?

Refinance your Home Loan

It is the time in markets where there is hope of good and cheering is reigning supreme. It is also the time when many look ahead for interest rates to come down. In such circumstances, refinancing your existing mortgage, also known as balance transfer of home loan, can be the alternative that would figure top in your priority list. And before you speculate on what should be your first move, here are certain reasons why you should go for it:

Saving of time and money is good sufficient reason to go for refinancing the home loan. Let us understand this with an example. Let’s say your home loan outstanding as of today is Rs. 50 lakh and the current interest rate is 11.5%. Then in that case you are paying an equated monthly installment of Rs. 53,322 and you are still 20 years away from the debt free status. But if you refinance the home loan at 8.65%, you will be paying an EMI of Rs. 44,307 – saving of Rs. 9015 per month. On the other hand, you can also keep your EMI constant. If you choose to pay an EMI of Rs. 53862, you will be debt free in just 16 years, a saving of four years. Put simply, you benefit in the process.

This saving is fairly significant as saving some money now amounts to creating wealth in the long-term. If you have five years to become a loan-free, you should believe of opting for refinancing. After all, it is your hard earned money and longer the time you pay back your home loan more money in interest payments. Second and the most significant rule is the current rate of interest on your home loan. If the current rate of interest payable on your home loan is 100 basis points more than the interest rate on offer in the market, you should think refinancing the home loan. If you have a home loan outstanding in your name, and any of these two conditions is met, it is the time to act.

So, what is stopping you from doing this? Is it ignorance or misplaced fear? Many a time borrowers are not conscious that the banking regulator RBI takes a decision that serves them best. Take for example, the abolishment of prepayment penalty on the floating rate home loan. This means that you are free to move to any other bank or home loan lender. However, your new bank may charge you some processing fee to cover the cost of due carefulness, it does while giving you the home loan. To that extent you have incurred one- time cost, which is typically in the range of 0.5% of the loan outstanding. Many banks put a cap on such charges say Rs. 25000. Some banks to waive it to lure good customers particularly if the customer has a credit score or CIBIL score of more than 750. If you have a very good CIBIL score, anywhere between 750 and 900, you stand to save on these costs.

If you do some homework about the prevailing interest rates offered by banks, you will certainly find some good deals. As interest rates are on the way down, you stand to advantage. If you refinance your home loan now, you are extremely likely to save more. So, focus your energies on these to make the most of the present situation.

27 Jan

Checklist for Documents when Buying a Used Car in Delhi

Finheal
Car loan
Tags: pollution under control certificate, RC, used car in delhi
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Documentations when Buying a Used Car in Delhi

Whether you are buying the used car from an individual broker, a used car dealer or a company, you have to make sure that all the paperwork is in order to keep away from future issues. Previous to the final payment, checking documents is essential and here is a list of documents that you must inquire for.

Registration Certificate (RC): It’s the most significant document that provides all the vital information about the used car in Delhi. Check whether it’s unique or duplicate. If later, find out the reasons and enquire with RTO for validity. Make sure engine number and chassis number are the same on RC. In case the car is registered in another state, you must get it registered in the state you are planning to use it.

Insurance: Get the car insurance transferred in your name before buying a used car in Delhi. Make sure the insurance premiums are duly paid and also confirm if the car insurance has ever been claimed by the previous owner or if it has been in a car accident.

Form 32 and 35: Get the Form 32 and 35 from the owner in case a loan was taken out to finance the purchase. It’s a no-objection certificate from the lender to show that the car loan has been paid off.

Road tax receipt: The owner must have paid off the road tax. If not, you may be held legally responsible for a penalty. Get a copy of the receipt from the seller.

Other documents: You should get a car buy invoice if you are buying from a human being seller and get the name transferred in the Pollution under Control certificate as well.

The above mentioned documents are a must when buying a used car in Ghaziabad. Apart from the documents, also make sure that the car is in good shape by getting it minutely examined.

25 Jan

How to buy a home with bad credit?

Home Loan if Bad Credit

In the present day and age that we are in this world in, it is very significant to have a healthy credit score before you believe of applying for any fresh credit line. Particularly when you are opting for a long-term loan such as a home loan your CIBIL score plays a very significant role. With the Reserve Bank of India having made it compulsory for banks to look at the credit score of an individual as a part of their credit evaluation process, banks must use your credit score as one of the barometers of your credit health. But does this mean that an entity with bad credit cannot dream of purchasing property with the aid of a home loan?

Don’t opt for traditional lenders
If your CIBIL score has curved in below 650 it is best not to go to a customary lender like a bank. NBFCs are recognized to be a little more flexible than banks as they look at other events of creditworthiness such as job profile and scope of future income, and even accept collaterals such as large premiums or gold jewellery, but even then, such loans come at a higher rate of interest that you will find difficult to negotiate if your score is low. The other option is to approach a P2P or a peer to peer lender if you are looking for a loan for a shorter tenure. The advantage of P2P platforms is that it connects the borrower to the lender, because of which you, the borrower, can save the intermediation cost that you would have otherwise paid to a traditional lender. Assessment of this nature enhances your probability of getting a home loan even with a bad credit score.

Opt for a lesser LTV and lower FOIR
The LTV is a significant ratio that is taken into consideration in a home loan. Irrespective of the lender, SBI home loans, HDFC home loans or DHFL home loans, it is the Loan to value ratio captures the amount of loan as a ratio of the total value of the property. According the RBI diktat a bank cannot lend more than 85% of the LTV, but banks more often than not go after their own set of guidelines while deciding the LTV. If you have a lower credit score you can choose for a lesser LTV which will improve your down payment but make you eligible for a home loan at a decent home loan interest rate.

While assessing you creditworthiness, banks also think another ratio called the Fixed obligations to income ratio or FOIR which basically is a calculator of the total amount of “fixed obligations” or expenses you must create in a month (inclusive of your home loan EMI) as against the salary you draw. Banks fix the EMI of an individual in a manner which is lower than the actual FOIR, even when a potential borrower has a good CIBIL score. In case of poor credit score, you could ask for the lender to think an even lesser FOIR, which will then translate into a lower loan amount.

Introduce a guarantor
A bank may have the same opinion to sanction a home loan to you still if you have a bad credit score if you can promise the presence of a guarantor. Pointless to say, the guarantor must have vigorous finances and a healthy credit score. He must also be aware of his responsibilities in case you are not capable to make a repayment on the loan because of some compulsory that you may face later on.

Improve your credit score
If none of the above options seem reasonable to you, you can take a footstep back and make a decision to get better your credit score before making a new application for a home loan. In fact, if you have the alternative to do this, this should certainly be considered seriously. The reason for this being that though a person with a bad credit is eligible for a home loan, he must make cooperation either on the interest rate or tenure front, eligibility ratios and even the lender. A good and healthy credit score and a healthy credit record on the other hand may help one clear the initial obstacle of eligibility and help him admission cheap and appropriate credit. If you are in a similar position and are at a loss about how to improve your credit score, you can always seek the help of credit repair or a credit development agency. Such an outfit will not only help you repair your credit score, but will also put you on a path that will not lead to similar credit related issues in the future.

Deciding to get a home loan to purchase one’s first property is perhaps the largest life altering decision that one is called upon to take in a lifetime. Doing so with a good CIBIL score is a sensible move.

24 Jan

Eliminate Your Fears and Doubts about Business Loan Rates

Finheal
Business Loan
Tags: business loan, lower interest rates, secured business loan
one comment

Fears and Doubts about Business Loan Rates

Capital is a vital part of the success of commerce today. Irrespective of whether a firm is in proprietorship or a big organization, finance holds the key to its growth, and managing finance is surely not a child’s play. Keeping all this in mind, more than a few institutions have come up with business loan to help budding and accessible entrepreneurs.

Very frequently, every business has to face a make-or-break situation which calls for instant savings to reap long term benefits. If one does not having the funds at that time, he may well opt for a business loan which is designed specifically to fulfill urgent business necessities. These loans not only help in expanding a business, but also take part in a vital role in modernizing and improving small as well as medium scale business.

Business Loans are offered in two types, Secured and Unsecured.

For a Secured Business Loan, the borrower needs to vow something as collateral or security against the loan amount taken. Be it as a raw material or finished products, land or machinery, anything can be kept as collateral in agreement with the lending party. The borrower can also offer cash advance as collateral as it offers more liquidity and the loan can be availed at lower interest rates and flexible repayment options.

In case of unsecured Business Loan, here is no prerequisite of any security from the borrower. However, while availing an unsecured business loan, the borrower wants to pay a high interest rate. Moreover, the loan amount is taken for a lesser tenure when compared to a secured loan. According to the tenure, business loan can be further diversified.

To meet the provisional needs of a business like short term working capital, a short term loan is most then suitable one, with the refund time period of a year. An Intermediate Loan is essential for starting up business to buy inventory, equipment and also add to working capital.

A Long term is necessary for well recognized business houses who wish to get bigger, increase their fixed assets or linked business acquisitions, with terms that run for a period of 3-5 years.

In addition, drawing the thin line between critical requirements and expenses that can be put off till a better financial situation prevails hold the input to prevent one from any financial predicament. Making a single hasty choice without any idea of its impact in your business may prove to be damaging in the long run. Therefore, one has to be very clear of his actual need and requirements for enhancing and improving his business by borrowing the rights loans with a detailed insight of its pros and cons.

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