Tag: cibil score

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.

 

Are you paying huge money for your auto loan?

All of us enjoy lavish lifestyle. And with availability of different types of loans in the market, it gets easier to splurge and live an exuberant state of life.

However at times, we spend more than what we need and it gets really hard to arrange for payouts of the loan. One of the commonly misused loans is an auto loan. Despite meeting all the formalities and checking the car loan eligibility sometimes you end up buying a really expensive new car and realize later on that you are paying a lot more than your comfortable means.

Sometimes, a failure in a business plan or shortage of funds could force you to do away with this added burden of life. But how to get away with the financial obligations when in the middle of a loan term—is a bigger question. For, failing to payback a loan installment can bring a red flag in your CIR and ruin the score for a very long time. After you fail to pay back EMI, it gets really difficult to clean the credit report. With a red flag, only question that would hover you mind is how to get a loan with low CIBIL score

So it is better you take the right steps beforehand and find out what all you can do when you are paying huge money for auto loan.

  1. Know the Car Valuation

First things first, find the market value of your car before you make any decision. You need to know your car’s worth and how much loan is pending and make a decision accordingly. You can easily calculate valuation of your car online on any of the auto selling portals. Just by filling details about your car such as date of manufacture, model, and condition, its valuation will be made. Alternatively, you can visit car dealers to know about the price of the similar deals and make up your mind.

Now after you know the value of your car, you know that if it is worth pulling the loan further.

  1. Sell the car

Well, it might not be the easiest of the options, but it is the wisest one. When paying your car loan EMI becomes a burden it is better to get rid of it all together. Selling the car gives you money which you can use to repay the loan and close the hard time forever.

The financial emergency would end and emotional difficulty may start as a follow up. You would need a lot of courage to get used to a lifestyle without a car. The need of the hour would be to use this opportunity to mend your finances and get back to a good credit score. You can buy a car within your budget later on.

  1. Refinance your loan

If you do not want to part away from your car, you should opt for refinancing. It enables you get better interest rate from some other lender. The new lender would pay for the current lender and you will pay to new lender at new rate.

Refinancing of loan works well when you haven’t made many installments. Also, by refinancing focus should be on reducing the car EMI and saving some cash in hand.

  1. Transfer the loan

Transferring the loan is basically transferring the ownership of loan to third party. For this, you need to check your bank’s regulations. These arrangements work the best when you have a friend or any other trusted party to assume your payments. However being a financial transaction, it is important that you get the loan transfer formally.

  1. Save on your car expenses

If you are able to make the installment with some of the difficulty, you may still continue your loan with certain change in your spending habits.

First of all you can save on your car insurance and car service expenses. Next you should make a budget so that you know what comes in and where it goes. You should maintain all the expenses and income. Use a mobile app to keep track of your expenses. It will help you outline the expenses you can do without. Hence you would save enough to retain some money during this hard time.

As important it is to save some funds month on month, as is to add some income avenues. Gradually the change in your financial habits would make your auto loan affordable to you.

You Must Evaluate Your Auto Loan on These Parameters before Applying

Although cars are complex machines with a number of moving parts and mechanisms, people still know more about car maintenance than auto loans. If you are planning to apply for an HDFC car loan or SBI car loan, etc. it may help to get familiar with the basics and assess a few things before giving your final nod.

The Down Payment

To attract new customers a number of car dealers and financing companies offer “no money down” structures in auto loans. In other words, you can practically own a car without making any down payment. However, this is usually not a good idea. This is because the smaller is the down payment (zero in this case) the more money you will end up paying in the long run in the form of interest. Depending on the interest charged on your auto loan, it is possible that you end up paying double the price of the car you have bought by the time the tenure is completed. Thus, it’s better to make a sizeable down payment even if you have the option of paying nothing at all.

Cost of Car Maintenance

Many people make the mistake of ignoring the car maintenance costs when applying for an HDFC car loan, etc. However, it can easily lead to a major financial strain when you have to pay the EMIs along with handling the maintenance costs. So, it’s better to settle for a loan term and EMI in such a way that you handle both the installments and maintenance costs easily.

Direct Vs Indirect Lenders

Usually, you can either finance your car from a financial institution directly or through the car dealer himself. However, while you may find it more convenient and simpler to have the dealer deal with the financing, it may cost you more than getting it done through a bank. This is because the car dealers often receive mark-ups on the interest rates offered on in the form of other monetary perks, etc. which can inflate the loan price. Thus, it’s better to compare both your options and pick the one that’s more economical.

Early Payment Fees

It is very important to enquire about the early payment fees or the prepayment fees for your loan. It is the fees that may or may not apply if you decide to repay your loan in full before the actual completion of the tenure.

If the prepayment fee is high then it is better to find an alternative loan. This is because people prepay their loans all the time, and if the same happens with you then you can avoid paying a large amount in the form of the early payment fine.

Interest Rates and Credit Score

Credit scores are linked to the interest rates offered by the banks in a way. This is because, loans for bad credit scores are usually offered at high-interest rates and vice versa. Thus, you should check your credit score before you apply for an auto loan anywhere. Since all the major credit bureaus of India, such as CIBIL, Equifax, etc. offer one free credit report per customer per year anyway, it won’t cost you a thing.

If your credit score is low then it is better to avoid applying for auto loans for a while, even if there are loans for bad credit as well. This is because it could damage your score even further. Instead, you should try improving the score first. Once you have increased it beyond the average you can apply to stand a better chance for approval and an attractive interest rate.

A large number of auto loans are rejected simply on the basis of credit scores. Thus, if you are having trouble obtaining a car loan of your choice, be sure to check your credit report. If you think it can be improved then you can get it done with the help of any well-trained and experienced credit expert.

If you can’t find one then you can always contact Credit Sudhaar, which has some of the best credit experts in the industry.