Tag: credit report

3 Things You Can Do Once Your Credit Scores Are Up!

Its a real big task when it comes in improving your credit score and maintaing it once u achieve the benchmark. If the score is built nicely from very start, and maintained the same repayment schedules, it not possible only that one can not get the graphs up. It that case, one need not worry about anything.

But, if one is not responsible in the repayments, has been constantly irregular, the scores go on toss. It is then very difficult to get you graph up. However, it is difficult and not impossible. Once you have Low CIBIL Score, it is then your task to first investigate where you went wrong. Look into your detailed repoert and see where all have you made mistakes. Start from correcting the places where you have made mistakes. IF it looks difficult to understand, take help of some credit advisors. Speak with the banks. Make them understand what went wrong while your intention was to pay for the credits you had taken.

Start using your credit card wisely. Use as much as you can pay. Start repaying in small amounts. And clear the old debts. By this you will start replenishing the old debts. And start rebuilding the score. Its important to Improve CIBIL Score. Once your score is up, you can then plan things for which you planned but could not do. Lets look at main 3 things one can do once the credit score is up!

  1. Apply for a loan at lower interest rate.

While you were planning to apply for a home loan or a personal loan when your score was down, the banks or the NBFC must have charged you an expensive interest amount which would have surprised you! Once your scored are up, try applying for the same loan from the same bank and you would come to know that there us a huge difference between the interest amount then and interest amount now. Once the credit scores are up, it is a sign that you a responsible payer and would not be an liability for the financial institutions. And hence you get lower interest rate compared to earlier one.

  1. Get your loans sanctioned in no time

While your scores were low, you had to run and climb staircase of all the banks, you went, inquired but in the end what you had was just disappointment. You came back home everyday with sad face as no one was ready to sanction a loan for you. But as soon as you scores are up, you need not worry at all. Now as and when you will apply for loan, because your scores are up, you loans will will be sanctioned easily.

  1. Upgrade your credit card limit

Remember, while you wanted to get your credit card limit up, but were unable to it. Why? Because of credit score. Credit score determined your eligibility for many things. Specially it determines the credit worthiness. Hoe much credit worthy you are. What is credit worthiness? Credit worthiness is a phenomena which gives an idea about how much credit can you manage without any burden. So when your score is up now and you apply for a upgrade in the credit card limit, it will be approved in minutes.

When you try to improve CIBIL score, and you are successful, there will be many things which would be approved or sanctioned which you wanted to earlier and could not but now with a better score, it will no hurdle. Credit Score is a sensitive area, you need to work it very diligently in order to make things on perfect way. Stay credit healthy and keep you score good!

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I Have Too Many Medical Expenses! Should I Take a Personal Loan?

It’s no secret that healthcare has become quite expensive today. Forget about the treatments for critical health conditions, even small medical issues can make a big dent in your savings. However, that’s not the real problem. The real problem is when you the medical expenses become too high for you to handle. When this happens, what are you to do?

There are three possible ways to manage medical expenses:

Insurance

If you already have an insurance cover, then you will be able to save some or all of the medical expenses depending on the cover limit.  However, if your expenses exceed the insurance sum, then you may need to arrange the remaining amount through any of the next two methods.

Credit Card

A credit card is extremely useful when you are traveling and don’t want to carry a lot of cash with you, or want to enjoy special discounts and perks when shopping online, or even just to buy expensive items on EMI basis. However, you can also use a credit card to pay for urgent medical expenses, especially when you are having trouble getting a loan for low cibil score.

If your medical bills are not too high, then your credit card(s) will be able to cover them in most cases. However, if the total amount exceeds a few lakhs, then it may be difficult to cover it all without looking into personal loans.

Personal Loan

When your medical bills are too high, then personal loans are your best bet. This is because these loans can be obtained for any valid reason, and healthcare is one of them. Also, there is usually a very high upper limit on the maximum amount you can apply for. That said, it still has some problems, which are:

Disbursal Period:

Traditional personal loans can take up to a week or more for a lender to approve. That too if you are offering collateral such as your house, stocks, etc. Since medical expenses often demand urgency, this option may not work for you.

Difficulty in Approval:

If you need a loan for low CIBIL score then it can become challenging to convince a lender. This is because most of them look for a CIBIL score of 750 or more. If yours is lower than this, then you may face a lot of rejections, especially when the loan is unsecured (without collateral).

A much better way to get a personal loan is to approach an NBFC (Non-Banking Financing Company). This is because the new-age finance companies offer flexible loan products that come with numerous advantages, such as:

  • Fast disbursals: A number of fintech startups offer instant loan disbursals. In fact, if you have the right documents, then you can expect to get your money in less than 15-30 minutes!
  • Easy Process: Another major benefit of an NBFC is that their loan procedure is simpler and convenient. Most of them have their own apps which you can download on your smartphone to apply for the loan on the go and at any time of the day. The paperwork requirements and formalities are also way more lenient than the traditional lenders.
  • Easy Repayment: Even the loan repayment is easier with an NBFC. This is because of flexible EMIs. In other words, you don’t have to pay a fixed EMI every month. Instead, you can increase or decrease the EMI amount from time to time depending on how much amount you are comfortable with.

Bottom Line

To sum it up, personal loans are one of the best options for paying your medical bills. That said, you still want to be careful about a few things. One of these is your credit score.

Just like other types of loans, a medical loan also requires attention to detail. You must take utmost care to not delay a single EMI and repay the loan on time. This is because your repayment history plays the biggest role in your score calculation. You must also never apply for a loan at multiple banks at the same time because multiple inquiries for your credit report also affects the score negatively.

Gold Loans: Worth?

While in this era, the loan is the very first thing which comes to everyone’s mind when they require a big amount of money, it also comes with its own pros and cons. First of all, let us understand what are different kinds of credits and what are different types of loans.

Types of Credit Secured Unsecured
Revolving Secured Credit Card Unsecured Credit Card
Installment based 1. Gold Loan

2. Home Loan

3. Auto Loan

4. Loan Against Property

1. Personal Loan

2. Business Loan

 

Now, depending on your requirements, there are different loans. The loan’s total amount and the interest to be paid on the loan depends on the salary you get if you are a salaried person or on the net profit u earn if you are self employed or a businessman along with your credit score.

Credit score plays a very important role in the speed of getting a personal loan and getting the lowest possible interest.

 

Ronit and Mayur were childhood friends. They both grew up together from kindergarten till their post graduation together. They always had similar interests in whatever they did. So, the studies also were always the same. But, their personalities were totally different. Ronit was calm and highly responsible in everything. And Mayur was a total opposite of that; always on toes, and irresponsible.  Ronit was Calculative and Responsible in spending money and also handling all his financial attributes. And Mayur on the other end was never calculative and super irresponsible in handling his finances. The result of which was : Ronit had a cibil score of 803 whereas Mayur had the score of 637. Now there came a time when they both were planning to take a loan. Ronit got loan easily with a very low amount of interest wherein Mayur had to go through tough time! He actually had to apply for a personal loan for low cibil score.

 

At any event in life, we do not consider the importance of few things, but in a long run, it definitely makes us pay a lot later. Like in the above case, everything was set. Good qualification, great job, nice family, but the ignorance towards handling a financial constraint had a huge loss for Mayur.

Ronit managed to get a personal loan at 11% interest rate. And Mayur however, got the quote with 18%  interest rate. Now by just looking at it, we feel that its just the difference of 7%, but when the amount is high, that 7% will actually be an installment for that month.

When these both friends were discussing this, Mayur came up with a thought of the Gold Loan. He had heard about this from one of his family members. Hence, they went and checked with few of the banks on the gold loan. Mayur as belonged from a well to do family, had decent amount of gold ornaments and even the gold biscuits. Now while they went for this loan, they got the deal for 13.5%.Obviously, it was better deal.

 

Now, what exactly happens while you plan for personal loan or a gold loan? The Personal loan comes under unsecured kind of credit, so; the risk is involved is definitely high. Hence the interest rate is also more. While in case of gold loan, it is a secured type of a credit, so; the risk involved is practically zero as the bank or a financial company for that matter has the exact amount of asset as much they have given it to you.

 

Let us look at few of the attributes of Gold Loan.

 

  • Minimum loan amount :      as low as 20000
  • Maximum loan amount : Upto 25Lakhs (Depending on various banks)
  • Disbursal Time      :      Hardly 24 Hours
  • Loan tenure      :      1year – 5 Years
  • Processing fees      :                 5% – 2.5% of total value
  • Pre-closure charges :                   No
  • Age      :      18years to 60 years
  • Documentation      :

 

Gold loans are the alternative of the personal loan, specially if you are planning for Personal Loan for Low CIBIL Score. As mentioned earlier, all the loans have their own pros and cons. You have to make a wise choice if the loan is perfect fit for you and it falls in which category and also if you have more pros! When there is urgent requirement of funds, and you are in a phase of increasing your credit score or you are a no history customer, Gold loans are definitely worth!