Tag: loan for low CIBIL score

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.

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Common Mistakes to Avoid When you apply for a Personal Loan

Getting a personal loan is easy these days, just login to your net banking there will be pre-approved loan options available for you, tailored according to your incomes and eligibilities and there you have the loan amount credited within a few clicks away. But not all of us understand the terms and conditions laid by the bank and end up hampering our cibil rating. There are many factors which one should take into consideration before going for a personal loan to avoid future problems with the bank.

To keep you avoiding such mishaps we will be sighting some common mistakes one makes while applying for a personal loan,

Purpose of loan

Before you go for a personal loan, just ask yourself do you really need it? Many try opting for a loan at time of emergencies, but there are a few who would consider taking a loan for fun and luxury spends. Do not take a loan until you are in a desperate need of money and this is the only option available for you. Emergencies like hospitalization of family members can knock your door anytime; you should always keep your finance lending options open for such situations. Do not waste your line of credit on luxury spends which you shall regret later.

No Research

These days we have tele callers calling us offering loans from different bank, if you are in need of money at that particular time, you will go with the same lender the tele caller suggests, this is wrong! We are living in a digital age and information on anything is just a click away, there is ample number of website which would suggest you different loan options from different banks and you can choose wisely which suits your need and budget. If your cibil score is bad, some website also suggests personal loan for cibil defaulters, but the interest rates will be relatively high as per market standards.

Not knowing your repayment capacity

Before taking a loan many people look for sanctioning maximum loan amount failing to understand their repayment capacity. Before taking a personal loan do understand your payment capacity and choose the loan amount accordingly which would not keep you on toes every month while making EMI payments.

Not disclosing existing Loans

Always disclose your existing loans to the lender before going for a loan. Eventually after a credit check the lender will come to know about your existing loans and may reject your loan proposal on integrity issues. You may get sanctioned a higher amount by not disclosing the existing loans but you will then find it difficult to make the monthly installments on time.

 

Not knowing your credit score

Credit score plays an important role on your loan sanctions. Higher the cibil score, you can go for a higher loan at the same time you stand a chance to negotiate your personal loan interest rate, in some cases you can also negotiate on the processing fees. Before you go for this, do check your credit rating and if your credit score is low, try to enhance it and then go for a loan.

Not understanding the loan terms and conditions

As personal loans are one type of unsecured loan, there are a lot of terms and conditions attached to it. many of us do not read the terms and conditions while signing the contract with the lender and end up losing big if a mistake happens in the future. It is suggested to take the booklet home and read the terms properly before signing it and if you find anything which was not told to you while you were going for a loan you can raise that doubt with your relationship manager.

Not taking your family’s opinion

Your family’s opinion matters. A loan is an unsecured short term loan which has high interest rates and short tenure which results to high EMIs. Your family will also be sharing this burden of EMIs and it is important to take their opinion on this weather you really need to take this loan or not.

Need is greater than want, is something which is thought to us from a younger age. One should not take a debt if not needed and if the circumstances demand where you need to take a line of credit from banks avoid small mistakes which can cause you big trouble in the future.

How to choose the right home finance company?

Owing to the rising prices of property, availing a home loan is one of the crucial steps when you plan to build your dream home. A lot of comparative analysis goes around when you consider factors governing the decision to choose the right bank or financial institution.

While you finalise a residential property and search for a lender to back your purchase, it is equally important to have a clear picture of your financial state in your mind. Your CIBIL score undeniably plays a significant role in your loan approval. In case you find that, your cibil score is low; the first step would be to search for a home finance company that offers home loan despite poor credit history.

While there is no denying the fact that you should compare the deals by different lenders before making the decision, there are several other aspects you need to keep in mind.

Loan Amount: With robust credit score you can avail loan for up to 85 percent of the property cost. The lender would consider your disposable income, property value, age, occupation, credit history, and number of dependants before finalising the loan amount. The more the lender approves, the lesser would be your down payment, but it would attract a higher EMI. If higher EMI is not a concern and you do not want to spend too much from your pocket as down payment; choose the lender that approves a higher loan amount.

Rate of Interest: Home loan interest rate is something that would influence your monthly instalments. Conduct a methodical online survey for rates and select the most competitive one. Have a proper understanding of the Retail Prime Lending Rate (RPLR) before sealing the deal. For banks, the lending is higher than or at the base rate as they cannot lend lower than the base rate. The housing finance companies give a discount on the RPLR. Understand it carefully and pick the right lender.

Consider the hidden costs: Most of the times applicants overlook the hidden costs like processing charges, document charges, administrative fees, repayment charges, switch fees and verification charges. It is important to collect all information about the charges before choosing the HFC.

Property type and location: There are HFCs that do not fund in specific localities and they even do not fund every property type. Confirm if the lender you finalize authorises loan in the locality of your choice.

Loan span: To increase your eligibility, banks offer home loans for up to 30 years. Housing Finance Companies generally do not grant a 30yrs loan.  Confirm the loan span while applying.

Disbursal & Processing Speed: It is important that you choose a Housing Finance Company which rule out the possibilities of delays when it comes to approving a home loan application. With right documents and verification reports, it should not take more than 10 working days to process the home loan application. An additional 3 working days generally for the disbursal of the sanctioned amount.

Reliability of the HFC: Home Loan is a long term commitment. Furthermore, you have your title deed mortgaged with the lender. It is, therefore, exceedingly essential that you choose a reliable lender. Reliable HFCs would always offer good customer support and flexibility. Confirm the dependability of the financial institution if you do not have a preceding relationship with the organization.

Credit history and records

It would be to some extent difficult to get hold of a housing loan in case your credit history is not up to the mark. Searching loan for low Cibil score is always a challenge. However, all doors are not closed. There are few housing finance companies that agree to offer housing loans despite your poor credit record. If you have a poor score first try to improve it so that it doesn’t affect the interest rate. Banks are too demanding in authorizing housing loan to an individual with poor credit history. The loan for low Cibil score not only attracts high interest rates but lenders put restrictions on loan period and guarantors.

You are recommended to go through all these aspects and keep these pointers in mind as you move forward to choose the best lender for your home loan. Do not hurry things up. Remember repaying a housing loan is a big liability and you should do your homework carefully beforehand to keep away from future hassles.