Tag: cibil score

Want to increase your Home loan eligibility?

Planning to buy a house? After accumulating all your savings still find it difficult to buy your dream home? Try considering home loans. They give you a helping hand buying your dream space. So how will you prepare yourself for a home loan?

Here are a few points to consider when considering a home loan;

Clear existing loans and credits

If you are applying for a home loan you should first try clearing all your outstanding debts and increase your savings on paper. This will give you a helping hand in terms of increasing your home loan amount and get the maximum out of it.

For Example: if you have a car loan running on your name chances are, that your EMI will be around five to ten thousand rupees. When it comes to a this loan the EMI structure ranges from 900 to 1200 rupees per lakh for different banks like ICICI Home loans, or HDFC home loans or DFHL Home loans. If you’re clearing your car loan while applying for a home loan, you will be automatically appreciating your loan amount to at least five to ten lakhs.

Reduce Credit Utilization

Try not to spend money while considering taking this loan. It can be one of the critical points when it comes to credit worthiness. Put your savings in place, if you find difficult to save money try investing in fix deposits and other financial products. This will give the bank or the financial company an understanding on your financial status and your spending patterns. The more you save the more you have chance to gain trust of the bank.

Avoid Job Change

When you apply for a bank loan the bank not only checks your financial status but also checks your employment patterns. You will be asked about your employment status and the total years of experience. You need to be in a particular company at least for a couple of years when considering home loan .If you have switched multiple jobs in short span of time it’s likely to get your application rejected.

Consider all incomes

If you have multiple incomes which you can show in your bank statement like freelancing jobs, existing property rents etc. try showing all your incomes and gains so that you can boost up your chances of getting a loan and also increase your eligibility for a maximum amount. It can help you be one step closer to your dream house or else you will have to shell out some more money as down payment.

Pool in your spouse
I
f you do not have multiple incomes coming in, you can always take help of your spouse or any earning family member. Many banks consider your spouse’s income as well when sanctioning the loan. There is a fixed pattern behind this, either it should be husband and wife as co-borrowers or it can be father and son. Sibling’s as co-borrowers are not allowed in many cases.

Increase tenure

As we all know these loans are a long commitment, considering government subsidies and offers of low interest rates is always suggested to opt for a long tenure. A long tenure helps you reduce monthly EMIs and live an easy life. If you opt for less tenure the EMI range will increase and that means you will have to work harder for meeting your EMI amounts.

Have a good cibil score

A good cibil score is built when you pay all your dues on time and are financially sound. When applying for this loan if your cibil score is bad then the bank will deny your loan. There are many non-banking financial companies who provide home loans for low cibil score people but the interest rate will be high compared to market standards. Maintaining a good cibil score takes a lot of dedication and cautious moves, so take the steps wisely and maintain the same.

Have good terms with the bank

It is always suggested to do a thorough research on the banks you have shortlisted for a home loan. Always consider that you owe to bank first where you get your salary or keep the savings in. If you are in good terms with your bank, the process gets easy and the home loan sanction is done in no time at all. Choose your banking relationship manager wisely and keep good relations with them.

Taking a home is a huge step in one’s life and loans are one of the ways to achieve what you dream for. You will have an amazing time through the process of getting the loan sanctioned if you adhere simple steps today!

How will you get best deal on Personal Loan?

A personal loan is the best credit instrument to meet the short term requirement on funds. What a borrower would want while applying for a personal loan is the interest rate. What does one want while applying for a personal loan? First the rate of interest being charged and second the speed of disbursal.

The banks and lending institutions keep advertising the attractive rate of interest rates but when one actually applies the reality hits hard. One may not be able to get the interest rate that was presumed. Now when the application has already been processed and there is a genuine need, one may not be left with much option but to accept the higher rate of interest. This may leave one with the thought of having got a raw deal. What should then one be doing to ensure that he is able to get the best deal on personal loan?

 

Awareness about the interest rates

First and foremost one must realize that the rates advertised by the banks are not a blanket interest rate to be extended to every borrower. The rates can vary drastically for two different borrowers within the same bank. The interest rates are an outcome of various factors including income, age, expenses ratio, city of stay etc. Other than this one’s credit profile which is also popularly known as CIBIL score calculation has a major impact on the interest rates being charged on the personal loan.

Check your credit report

Since the CIBIL score of an individual has an important role to play in the underwriting process, it is only prudent to be obtaining the CIBIL report before applying for a loan. It takes only few minutes to get the report. Check out if all your accounts have been updated properly and there are no anomalies. Since a study by Credit Sudhaar states that one of four reports has errors, there could be a chance of your score getting impacted for an error. Generally a score of 750 and above is deemed to be a healthy score and if your score is above 750, you are good to go for applying for that personal loan.

Check on your income expense ratio

This is again of high importance. Please be aware that generally the banks take 50% of one’s income as monthly expense towards living. The other part can be dedicated to servicing of the EMIs. Put together the existing loan and credit card obligations and the EMI of proposed loan, the amount cannot be more than 50% of the income. So calculating it before applying will only help in faster access.

Pay off credit card balance or close a loan

In case your EMI obligation is going beyond the 50% ratio, you may be required to pay the credit card outstanding or close an existing loan. This will help in you getting the approval.

Hunt for the best deal

It is recommended to get offers from multiple lending institutions before applying for the loan. This will give one the power of bargaining and getting the best deal. Generally, the bank where one has a relationship is where the loan is applied. But it is not necessary to get the best deal with one’s own bank. So checking out with others will only help.

The key would be to give all required details but not to actually apply. Every time one applies the lender runs an inquiry on the credit bureau and multiple inquiries can bring down your credit score. Also, this may get perceived as credit hunger by the underwriter and may be one of the reasons for shooting up the rate of interest on the loan.

Check on the offers

There are times when there are offers from the manufacturers and the banks where one can get a better deal in terms of the overall cost. Say for example, one is looking at buying new furniture or electronics items, do check out with the manufacturer or the retail store if there is an offer from any of the banks. There are special offer running during festive seasons that may make the deal over all quite attractive even if a marginal higher rate gets charged.

Negotiate for charges

Interest rate is not the only component. There are other charges that one needs to watch out for. Processing fee, pre-payment penalties, lock in period are few such charges that shoot up the cost of borrowing. Negotiate for a lower processing fee since it will save on the upfront charges. In case you wish to prepay the loan, a lower foreclosure charges will help. Similarly, reduction of lock in period can only help you saving money being paid as interest should you decide to close the account earlier.

How your credit management can impact your job!

It is known that your cibil score determines your eligibility for securing a loan or a financial product, but it is also important while securing a Job.

These days if you are trying to get employed there are various company norms in terms of background verification to secure a job that is address, Education, Employment, etc. majority of top corporates also are indulging themselves in finance background checks for any Cibil defaults or Loan defaults. This process helps companies to understand if the person is financially sound and also takes his payment integrity seriously

 

Reasons why Cibil Defaults Worries Employers

There are numbers of reasons why you have defaulted a loan and it would make it difficult for you to secure a job.

The very first thing what bothers an employer to hire a Loan default is the question, can the candidate make a good employee if he has been offered a mid-level or higher level Job which  demands a lot of integrity and dedication. A bad Cibil score is led due to loan defaults, payment issues which obviously mean the candidate was not serious about making the payments on time. If a Candidate is unable to cope up and manage their own incomes and loses, how is the person expected to be contributing to the growth of the company.

A loan default can lead to difficult life circumstances. For example, if you don’t pay your EMI’s on time that will lead to a bad Cibil score which leads to different penalties, that means you have to shell out more money than usual, which means you have to dig more in your pocket and cut on your other expenses which can lead to mental disturbance and depression which will automatically hamper your work and no employer would take the risk of hiring such employee.

If you have are going neck to neck with another candidate for a similar position in an interview, a great cibil rating as a tie breaker will help you secure the job over the other candidate.

 

Employers Invest in Permanence

Employers always want to hire employees who are evident that they are made for a long run. They want people who can manage themselves in terms of money; stature etc. now a person who cannot manage his Loan defaults will obviously make a bad employee and hence will be not given employment options.

How to Prevent Cibil Defaults

Check your Cibil report:

Check your Cibil report on a frequent basis, in particulars to your EMIs and credit card payments. Check to ensure there are no late payments incorrectly listed on your account and if you find one, do reports it with necessary proofs.

Manage Incomes:

Manage your incomes and gains so that you don’t default on paying your dues on time, this will ensure a good credit health; a good credit health means you can try getting a quick loan at unexpected hard times.

Say no to Credit Cards:

For some people credit cards are a matter of stature and spend unwillingly on the same, but when the time comes to pay the dues one understands the expenses were just not right. Maximum number of cibil defaults is because of excessive use of credit cards and not making the payments later.

Apply for what you need:

If you are applying for a loan, calculate first how much you need and then apply majority of the times people take loans just because they have opportunity to take one exceeding the actual amount needs. But when time comes to pay dues it becomes very much difficult to cope up with the EMIs.

Seek Professional Help:

If nothing is working out and you are out of ideas to prevent further damage on your cibil default, seek professional help. There are professional agencies who help you to overcome your loan defaults ad also help you secure a loan.