Work involves him to venture out widely to unfamiliar Insurance Company areas to regulate the IT frameworks of different customers and keep up associations with them. Since his folks live in his hometown, Rakesh purchased a house for himself in the city near his working environment. In any case, because of his broad travel and work responsibilities, Rakesh’s home is abandoned for at any rate a month to a half year in a year.
Thus, rather than going for a customary home insurance strategy, Rakesh decided to go for insurance for empty homes. The insurance for abandoned homes not just defends and guarantees Rakesh’s home from fire, robbery and harm yet in addition gives him genuine feelings of serenity while he is away for work.
Do you own a subsequent home or does your work expect you to travel most pieces of the year? Try not to stress! You would now be able to profit insurance for empty homes. With quick globalization and expanding expendable wages, individuals are presently purchasing more than one property, either to be utilized as a subsequent home or for venture purposes. Notwithstanding, keeping it empty can open it to significant danger of defacing, illicit infringement or primary harms.
What is Insurance for Abandoned Homes?
Insurance for abandoned homes can be alluded to as forte property insurance intended to make sure about your uninhabited house in the event of robbery, misfortune or harm.
Abandoned homes represent a more serious danger of thievery, harm or defacing for the undeniable explanation that there is nobody remaining in the house to forestall it. In addition, it is likewise at more serious danger in the event that there is an underlying or electrical flaw or harm inside the house yet isn’t accounted for or managed quickly, which could bring on additional genuine harms. For instance, if the gas pipe begins releasing and isn’t accounted for promptly, any little sparkle in the region can result in genuine outcomes like the house burst up into flames.
For what reason do I need Insurance for Empty Homes?
In the event that you are away from your home for over 30 days at a stretch, you might need to think about purchasing insurance for abandoned homes, since various insurance organizations have various arrangements for giving inclusion to any harm caused during the period the house was left vacant. Henceforth, it is fitting to address your guarantor to comprehend explicit constraints around the range of time the house could be left vacant and how the organization characterizes it.
The following is the rundown of few situations which could legitimize why you need to take insurance for vacant homes.
- You’ve purchased a subsequent home and visit there just couple of times in a year
- You’ve purchased another home however would take a little while before you move-in
- Your work expects you to travel broadly for most pieces of the year
- You will be away for two or three months for clinical treatment
- You’ve moved to a better place as remodels are going on
- You lease your home to inhabitants and are currently finding another house
- What are the costs required when contrasted with the normal home insurance strategy?
You may buy the insurance as a different arrangement or as an extra to your present home insurance strategy relying on the insurance organization’s approach inclusion and according to your need. Different home insurance strategy suppliers have changing arrangement conditions and inclusion alternatives. On the off chance that you are accepting it as an extra to your present home insurance strategy , chances are it might just cover the property for harms caused because of fire or robbery. In addition, on the off chance that you take independent inclusion for empty homes, you may cover it for 10-12 situations, for example, fire, robbery, defacement, deficiency of substance
Insurance charges for vacant property are by and large higher than standard home insurance strategy because of the higher danger related with it. Be that as it may, in the event that you are sure about the particular number of weeks or months you will be away from home, thinking of it as would be a brief period, you may examine this with your guarantor and make changes to the arrangement premium on favorable to rata premise to shield it from harm while it was empty.
Be it work, travel or venture, insurance for abandoned homes will help you secure and defend your new Home Insurance from unexpected conditions and with full inclusion.
According to a recent report, credit card debt in the country between 2015 and 2019 has increased rapidly, averaging around 27% annually. To this end, with the average credit card interest rate around 41%, failure to manage the debt ensuing from such card’s usage can be quite damaging to one’s financial health.
Therefore, it is imperative to know the ways via which you can manage your credit card bill payments and avoid falling into a debt trap.
6 tips to manage credit card outstanding efficiently
- Change your spending habit
The best way to avoid the trap of high credit card interest rate is to alter your spending habit. You can create a budget for your monthly expenses and spend accordingly. It will help you to limit your expenses and keep your credit utilisation ratio lower. A point to note here is that, high credit utilisation ratio can also negatively affect your CIBIL score.
- Convert bills into EMIs
In case you are struggling to pay the bills on time, thereby increasing your total debt, you can talk to your card issuer and opt for the EMI facility. It will streamline your repayment process, and assist you to clear your debt faster. While you can enjoy interest-free EMIs up to a certain tenure, you will be interest eventually. However, this interest amount is comparatively lower than what you will be charged for defaulting regular repayments.
- Utilise the interest-free period
Every credit card has an interest free period of 45-50 days, and if you can complete your payment within that period, you can save yourself from paying any extra amount over your bill amount.
- Pay off the ones with the highest interest rate first
To mitigate your credit card debt, you can choose to pay the ones with a higher interest rate on priority. Individuals often make the mistake of repaying the bills with low outstanding first, consequently letting interest gather on other debts. Since interest on late payments is considerable, it is ideal to repay the ones that charge such a higher rate of interest at the very onset.
- Paying more than the minimum amount
Credit card users often follow the practice of paying just the minimum amount due, effectively falling into a debt spiral that is not easy to get out of. Therefore, instead of paying just the minimum due amount; repay something extra to reduce your total debt. There are many convenient options to pay credit card bills, explore them.
- Know the billing cycle
A billing cycle is the 30 day’s period during which the credit card company records all your transactions, and sends you a statement accordingly. As a user, you must be aware of this cycle, as it will help you to reap the benefits of interest-free period and plan your repayment better.
Since credit card interest rates are usually high, it is ideal to monitor your credit card debt regularly to avoid any issues. You can do so easily via the official website or mobile application of your respective issuer. NBFCs like Bajaj Finserv allow their customers to access every detail of their Bajaj Finserv RBL Bank SuperCard via mobile applications and repay their bills as well. Additionally, the competitive interest rate and a host of other customer-friendly features help individuals manage their financial requirements without any issues.
Furthermore, the company also provide pre-approved offers, which streamline the application process and save time. These offers are available on financial products like credit cards, personal loans, business loans, etc. You can quickly check your pre-approved offer by submitting your essential contact details.
Credit cards are an excellent financial tool if used correctly. Otherwise, the high credit card interest rate can become a one-way ticket into a debt trap. You can follow the tips mentioned above to manage and repay your credit card debts efficiently and refrain from mounting dues.
The demand for home loans is expected to be significant, with the future prospects of growth remaining strong.
- The predicted growth rate in this sector between 2021 and 2026 stands at 22%.
Affordable interest rates, along with urbanisation increasing at a steady pace, are expected to drive this growth in the coming years. In the past few months, the housing loan interest rates have fallen to an all-time low, benefitting not only new borrowers but also the existing ones.
With a home loan transfer, individuals with existing housing credit can further avail lower rates on their outstanding principal amount. Nevertheless, one must first understand the basic principles of such a credit transfer to know when it is most profitable to opt for one.
What is a home loan balance transfer?
Existing home loan borrowers carry an option to switch their outstanding loan principal from their current lender to a new lending institution.
In such a case, the new lender pays the pre-requisite amount to one’s current lending institution, effectively clearing all dues. The borrower continues to pay EMIs for the home loan but to this new lender and not the old one.
The primary benefit of a home loan transfer is that it allows a borrower to pay interest at a lower rate when compared to his/her previous lender. This check on interest outgo can either result in reduced loan tenure or decreased EMIs.
If one can undertake such transfers at the opportune time, the option can lead to sizable financial savings. However, before choosing a home loan balance transfer, one must consider a few key factors to ensure profitability from such a move.
Factors to consider before opting for home loan refinance
- Check the scale of EMI reduction
Home loan borrowers, mostly salaried individuals, often face a challenge in meeting the monthly liabilities when servicing such credit. Still, most housing loan borrowers in India are salaried.
- 88% of the home loan borrowers in 2020 comprised salaried individuals.
Thus, if you are opting for a home loan balance transfer, you should consider whether the new EMI amount represents a significant reduction from the previous figure.
A minor reduction may not be worth undertaking the hassle of such a refinance. Using a home loan balance transfer calculator, one can easily determine the total amount of savings, along with a decrease in EMIs.
- Check whether your home loan interest is charged as per RLLR or MCLR
Interest rates on home loans in India are linked to an external benchmark, generally either MCLR (marginal cost of funds based lending rate) or RLLR (repo linked lending rate). Those with MCLR home loans often do not receive the best interest rates due to a lack of transparency in reflecting any mandated rate changes.
The Reserve Bank of India, on the other hand, adjusts the repo rate from time to time, which can often lower the rates, typically RLLR, offered by financial institutions to home loan borrowers.
- Since February 2020, RBI has slashed repo rate by 115 basis points (100 basis points = 1%).
- This repo rate cut has translated into interest rate reductions ranging between 70 and 90 basis points for most home loan providers.
If your existing lender follows the MCLR benchmark, shifting to an RLLR-based home loan refinancing option may be more beneficial since you would be able to take advantage of adjusted rates.
- Consider the remaining tenure for your home loan repayment
Considering the remaining tenure is crucial when pondering over home loan transfer. To pick the correct time to undertake such a step, one needs to possess significant insight into the amortization schedule of such loans.
EMI for any credit is composed of two aspects, namely principal and interest components. Every month, a portion of home loan EMI goes toward servicing the principal outstanding, while the remaining is assigned to the interest accrued.
During the initial years of your home loan repayment, the interest component forms the majority of your EMIs, while the principal portion is limited.
Thus, early on in the tenure would be an ideal time to undertake a home loan transfer, making it considerably beneficial in terms of the total interest payment as per the applicable rate.
For instance, if you are just four or five years through your repayment tenure of 20 years, refinancing can lead to hefty benefits. However, balance transfer would not be profitable if you undertake it after 15 years of repayment for a loan of similar tenure.
- Additional charges for a balance transfer
Borrowers should know that balance transfer basically means closing one loan account and opening another with a different lender. Therefore, they need to bear the processing fees, foreclosure charges, and other costs to refinance.
If such costs are more substantial than the savings you stand to make after initiating a home loan transfer, you should reconsider your decision.
- Top-up loan facilities
Borrowers planning to refinance their existing home loans also need to know about top up loan on home loan. These are additional credits offered by the new lender to individuals who choose to refinance the existing home loans with them.
Top-up advances are available over and above the transfer value and come with no end-use restriction.
Reputed financial institutions extend attractive top-up advance offers to home loan balance transfer borrowers. Such advances are high-value credits amounting up to Rs.50 lakh.
Some lenders also provide pre-approved offers to simplify the loan availing process and help save time. These offers are available on several financial products, such as home loans and loans against property. You can check your pre-approved offer by submitting only your name and contact details.
Now that you know everything about home loan balance transfer, it should ease the process while ensuring maximum benefits from the facility. Make sure to check the additional eligibility of a new lender, if any, before you apply to experience a hassle-free transfer of your existing home loan outstanding.
Around 79% of all loans in India are approved for consumers with a CIBIL of 750 or above. CIBIL or the Credit Information Bureau (India) Limited is an organisation, which tracks the creditworthiness of each Indian, through his/her credit history and other factors.
All lenders today thus check a loan applicant’s CIBIL or credit rating in general, when processing a loan application. Therefore, to improve one’s likelihood of availing loans, he/she must be aware of CIBIL score calculation and the factor that weigh in to determine one’s score.
What is CIBIL score?
CIBIL or credit rating refers to a 3-digit numeric figure, representing the creditworthiness of an individual based on prior handling of loans or advances and credit discipline adopted. An individual with a clean record of timely repayment of loans or credit card debt often carries an impressive CIBIL score and vice versa.
CIBIL scores range between 300 and 900, whereby a score of 750 or above is generally considered sufficient to avail various kinds of loans in India. While you can get a personal loan if you have a bad CIBIL score, it is best to take measures for score improvement when planning to avail finance. It is primarily because the terms for such a loan are often not in the borrower’s favour.
Factors affecting CIBIL score calculation
The following four major aspects determine whether an individual carries an impressive credit rating or otherwise –
- Payment history – It refers to your track record of servicing loans in general, and is indicative of your repayment habits. Your payment history thus depends on whether you have closed dues in time or if you have defaulted on such payments in the past.
- Multiple enquiries – Successive and substantial number of loan enquiries can hamper your credit rating since it indicates that you are likely to avail fresh debt soon.
- Credit mix – If you want to improve your CIBIL score, attaining the perfect balance between secured and unsecured credit mix in your loan portfolio is critical. If you avail too many loans of one particular kind, your credit rating may suffer as a result due to one type of advance outweighing the other, thus hampering your future financial standing.
- Credit utilization ratio – If you consume too much credit in a short span, it indicates a credit hungry nature and also lowers your repayment capacity. The credit utilisation ratio thus indicates the total percentage of credit already consumed out of the total credit available to you, with an ideal ratio standing between 30 and 50%. A high ratio, too, can thus negatively affect your CIBIL score calculation.
How to check CIBIL score for free?
As per the RBI guidelines, CIBIL is obligated to offer one free credit report check to every individual. Moreover, one can check this score online, by following the steps mentioned below –
- Step 1: Visit CIBIL’s official website.
- Step 2: Fill in the requisite form with necessary details like name, contact number, email address, and others.
- Step 3: Enter your PAN number.
- Step 4: Answer all questions regarding past loans, credit cards, and repayment correctly.
Based on this information, CIBIL provides your credit score instantly. If you want to generate more than one credit report in a year, you can go for subsequent reports against a stipulated charge.
Ways to improve your credit score organically
One can adopt various ways and do several things to improve his/her personal credit score. Understanding the CIBIL score calculation process should give you an insight into how you can approach credit rating improvement –
- Never avail substantial credit, which you may find challenging to repay. Late EMIs or credit card bill payment can hurt your credit score and vice versa.
- If you have availed personal loans in the past, try to avail secured credit options in the future. Such a credit mix is viewed as a positive trait in potential lenders.
- Keep your credit utilisation ratio to a minimum. For instance, if you have availed a credit card with a limit of Rs.1 lakh, ensure you use only up to Rs.40,000 – Rs.50,000 for the existing billing cycle.
- Check your credit report every year and intimate any errors that may crop up in your report for rectification. Although not frequent, CIBIL score calculation may be a result of errors or omissions in one’s credit records.
If your credit scores are high enough and are an existing customer, you can also avail pre-approved offers from lenders like Bajaj Finserv. These offers are available on a range of financial products, including personal loans, business loans, credit cards, and more. You can check your pre-approved offer by providing your full name and contact details.
As a potential borrower, CIBIL score is one of the integral determining factors you should keep in mind and identify if your CIBIL score is getting you down when availing finances. The scores in this scale can dictate the interest rates and amount of funds you can avail as a loan. Additionally, it can also determine whether you are eligible for unsecured and secured credit.
The major challenges that the investment banking sector will encounter in the late 2020, or early 2021, would revolve around market digitalisation and electrification, high capital charges, layered and inflexible technology involving high degree of sophistication, stuck cost base, and stringent regulations.
This year is going to be an interesting one, provided that there will be many hurdles in the pathway to success for the banking sector? The chances are, that there will emerge a banking ecosystem that will be highly volatile. The conditions that seem most favourable, constitute the latter half of the year filled with destructive storms, similar to what happened in 2008. The chances are very slim that the investment banking sector will see a bright and rewarding 2020.
On the other hand, a small percentage of professionals in the said sector may have to let go off their respective jobs, given the degree of recession, COVID pandemic has brought in. However, there will emerge new opportunities, once the epidemic ends. Most of the professionals who have been laid off recently, will find opportunities to come back into the workforce.
For young finance graduates, it will be a great opportunity to break into investment banking, the moment pandemic ends, and the job market revives. Getting your hands on industry-relevant investment banking certifications would certainly be a great competitive advantage.
The Majority of the Year Will Go Into Dealing with Crisis Recovery
Second half of the year is expected to make investment banks busy dealing with the post economic crisis revival, and there is every chance of fin tech firms rising high amid all of this. However, the predictions many go wrong like a weather forecast, but similar to climate science, the trends always indicate the looming truth. And that’s why, it’s high time for investors and banks’ c-suite executives to plan attentively for the remaining of the year.
Top 6 Challenges That Await the Investment Banking Sector
Difficult Regulatory Norms
There is an international standard, called IFRS 9, designed and developed by IASB (International Accounting Standards Board) that oversees financial instruments. It constitutes a whole set of mandatory rules & requirements that are to be stringently followed by the banks. It leads to a different level of sophistication and complexity for bankers. BASEL, the international regulatory organization, too, has soared its minimum capital requisite for investment banks from 2% to 4.5%, advancing from BASEL II norms to now new, BASEL III norms. Such difficult standards set by the regulatory bodies can lead to many financial institutions forced to change their behaviour of working.
Amid the intense competition among the different banks in the said sector, the continuous need to launch and offer new services from time to time, has become a mandate. Servicing your clients and customers well, is the need of the hour for investment banks around the world, or you simply lose them, as your immediate competition would grab the chance of attracting your client/customer towards them.
To remain competent as an investment bank in 2020, you ought to offer new and diverse services to your customers that entice them, and keep them glued to you. Coming up with new services that the clients of investment banks would like, will be a big upcoming challenge in the latter half of the year.
With the advent of BASEL III, there has come limitations to product profitability. Arrival of such new regulatory standards does affect the profit-making, and ROE (return of equity). Banks will need to dig into their current business structure to identify the loopholes, and get rid of the non-profiting services and transactions. Efficient capital management will be the key to success, as it’s quite evident that the available capital to the banks is absolutely scarce at this point in time.
Challenges with Cross-Border Service Offerings
A majority of large investment banks are known to offer international banking services, which is worth a trillion-dollar market to tap into. However, the introduction of new stringent regulations this year, have made it intensely difficult to seamlessly provide for cross-border services. The disadvantages of transacting in bitcoin (popular cryptocurrency) for international payments are not unheard of. However, blockchain has emerged among the most-promising disruptive technologies that facilitate cross-border transactions, but with the recent happenings of hackings and fraud, has put it under ‘unsafe’ category.
Cost-Management for the Services Extended
Cost-optimization would be a big worry amid the strict government regulations that are needed to be followed by the banks, in 2020. The laws been formulated off late by the governments across the world, has hit the ROE of banks really hard, and has forced them to reconsider their production costs. Bankers need to ensure that there is no loss incurred while they offer their clients, the services of their liking. And for that, performing effective cost management and detailed risk analysis is required.
Financial service firms are the most vulnerable to malware attacks and hacking. Reports of a number of digital thefts and frauds have been observed in the recent past, pertaining to investment banks and financial institutions, globally. Banks will need to deploy stringent network security algorithms to their central servers so as to help prevent such mishaps. If the banks want to survive in this digital age, they will have to cope up well with the loopholes in the system.
Channel finance can be described as a working capital financing facility, which enables channel partners like dealers, distributors or buyers to purchase goods and services. Typically, it is a short-term advance that enables supply chain stakeholders to avail funds from financial institutions for fulfilling various working capital requirements.
Additionally, several other benefits that accompany channel financing make it vital for the supply chain of a firm.
Reasons why channel finance is valuable
Channel financing offers several unique features and benefits, which is why it has become so crucial for an organisational setup.
Some of the most noteworthy benefits are as follow –
- Helps to meet the working capital gap
Generally, a firm’s working capital remains tied-up in its supply chain until all its invoices are processed. The said gap between sale and payment often leaves a cascading impact on various aspects of trade and retail.
With the help of channel financing, businesses can easily fulfill their working capital deficiency and continue with everyday operations. Also, a substantial loan value allows borrowers to meet all their financial requirements without straining available funds.
2. Offers collateral-free loan facility
Facilities like invoice financing enable businesses to avail a high loan-value without pledging any asset as security. This puts borrowers at ease and enables them to access funds without going through rigorous and lengthy verification processes.
3. Accompanies simple eligibility criteria
Leading financial institutions like Bajaj Finserv extend funding under channel financing against easy to meet eligibility criteria. Typically, the standard eligibility criteria to avail a business loan like this require the following –
- Applicants must belong to the age group of 25 years and 55 years.
- They should own a business for at least 3 years.
- The business in question should have filed ITR for at least a year.
Such institutions offer customers with pre-approved offers to further simplify the process of availing finance. Such offers are provided on multiple financial products including business loans and personal loans as well. You can check your pre-approved offer online by entering your name and contact number.
4. Simple documentation
Eligible businesses need to submit a set of documents to attest its eligibility criteria for invoice finance. Typically, applicants are required to submit documents that serve as valid proof of identity and address, like any KYC document.
Other than that they are required to furnish documents attesting for their income, such as ITR, bank statements, etc. It must be noted that documents required for a business loan for self-employed professionals and other prominent business entities may vary.
5. Quick approval and disbursal process
Most leading financial institutions that extend funds under channel financing offer quick verification process. As a result, applicants receive faster loan approval, typically within 24 hours, as well as quick disbursal process. All these help businesses gain access to the required funds and meet their business requirements quickly.
Hence, it can be said that the benefits of channel finance help businesses to meet their working capital needs and streamline their operational activities effectively. Regardless, businesses should factor in a few things about this form of funding option to facilitate effective supply chain management. For instance, an applicant should find out more about the accompanying interest rates, the terms of repayment and additional charges and processing fee before applying for a credit.
Most financial institutions allow individuals to apply for a channel finance facility either online or offline.
One can apply for this credit option online by following these simple steps –
Step 1 – Visit the website of a financier.
Step 2 – Navigate to ‘Supply Chain’ finance option.
Step 3 – Click on ‘Apply Now’.
Step 4 – Fill up the form by providing the required details.
Step 5 – Verify the details shared and click on the ‘Submit’ button.
Once these steps are completed, representatives will contact applicants to initiate the verification process.
In a nutshell, it can be said that features like simple eligibility criteria, hassle-free application process, minimum documentation and high loan value makes channel financing an attractive funding option. Also, with a fair idea of these factors, one can benefit from this funding option and improve the quality of their operational activities significantly.
Personal loans are a suitable funding option in case of an emergency since they can be availed of quickly and with minimum eligibility. Moreover, they are available as an unsecured credit, which means that borrowers do not need to provide any asset as collateral to avail this loan.
Nevertheless, interest rates on personal loans can be a differentiator as to whether a borrower opts for the advance or not. Also, with multiple factors affecting interest rates, a person with the right eligibility stands to negotiate with the lender for affordable rates.
Hence, borrowers can go through the below pointers to know how to avail the best personal loan interest rate.
Ways to avail of a personal loan at attractive rates
- Check CIBIL Score –
CIBIL score is one of the most critical parameters that lenders consider before approving a personal loan. It is a numerical representation of one’s credit history. Lenders thus refer to this score to assess borrowers’ creditworthiness.
Accordingly, a high credit score of 750 or above suggests responsible credit behaviour and the borrower is considered to be of low-risk by lending institutions. Applicants with a high credit score, therefore, stand better chances of availing competitive personal loans interest rates.
Their loan application also stands a chance of quick approval by financial institutions. Moreover, it also creates a scope for them to negotiate with their lender for a higher loan amount.
On the other hand, lending institutions charge a significant interest rate from borrowers with a poor CIBIL score. Hence, they should adopt the following measures to improve their credit score –
- Strictly regulate their credit utilisation ratio to 30-40% of the total credit limit.
- Pay off the maximum of their existing debts.
- Avoid applying for multiple credit cards or loans at the same time.
- Maintain a healthy balance between secured and unsecured credit options.
- Leverage your employment credentials –
Borrowers with a stable source of income who are permanently employed at a reputed firm or organisation – public or private, are considered eligible for timely loan repayment. Hence, they stand better chances of availing personal loans with favourable interest rates. Self-employed individuals with a steady source of income, such as doctors, chartered accounts, etc. can also avail low-interest personal loans conveniently.
- Create a positive repayment history –
Apart from the CIBIL score for a personal loan, lending institutions will also take into account your repayment history, which is a record of previous or existing loans or credit card payments. Timely payment of loan EMI and credit card bill will result in a positive repayment history creation.
In contrast, defaults and late payments will lead to a negative or poor repayment history, which in turn, can hurt your credit score, thus hampering your chances to avail a personal loan at competitive rates. Hence, you must maintain a positive repayment history to avail personal loan at low interest.
- Look for seasonal offers –
During certain times of the year, such as the festive seasons, lenders provide competitive personal loan interest rates and other attractive schemes. You will be able to save a substantial amount on interest repayment if you take advantage of such seasonal offers. However, you should check other fees applicable to your loan before applying.
Furthermore, some lending institutions such as Bajaj Finserv also provide pre-approved offers on personal loans to facilitate hassle-free loan processing. Besides personal loans, such offers can also be availed on other unsecured credits such as business loans, credit cards, etc. You can check your pre-approved offer by entering only essential details like your name and contact information.
Borrowers should also keep in mind that there are various methods of interest calculation used by different lending institutions, which can affect the total interest payment even though the personal loan interest rate specified by the lender is low.
For instance, some lending institutions use the flat interest rate, whereby interest is calculated on the total loan amount throughout a tenor. Some lenders employ the reducing interest rate method, where the interest is calculated on the outstanding loan amount. Hence, in the former approach, the interest amount is constant, whereas, in the latter, it reduces over time.
Apart from knowing how to avail the best interest rates, applicants should also know about the eligibility criteria. Plus, arranging for all important documents required while applying for a personal loan helps streamline loan processing.
While you may be inclined to stick with your debit card or carry around cash, using a credit card has its own benefits. In fact, with a credit card, you can both save on your spending and gain from a better purchasing experience. While being too dependent on your credit card and using more than you can repay can lead you to debt, prudent use of this tool can improve your financial health. So, if you are wondering if you should go for credit card apply, take a look at its benefits to make the right choice.
Convenience of credit
One of the major perks a credit card brings to the table is that it is universally accepted. This isn’t always true for your debit card. Additionally, credit cards give you increased purchasing power, allowing you to make big-ticket purchases without dipping into your savings. However, be wise when using a credit card as you alone are responsible for its repayment.
Financial security and fraud protection
Having your debit card skimmed, stolen or subject to fraudulent transactions is money stolen right out of your account. This however, is not the case with credit card, and due to that fact lenders provide you with a lot more security when it comes to credit cards. Some lenders such as Bajaj Finserv let you disable your credit card from your smartphone if you ever suspect fraud. Additionally, you also enjoy financial security in the instance that you’ve paid for a service but it wasn’t carried out. Disputing transactions is extremely simple and in most cases the transaction is reversed as soon as you report it.
Rewarding features to help you save
The reward system offered by credit cards is a favourite among consumers simply because of the value it adds to the purchasing experience. Some issuers let you earn points based on the transaction amount or the number of transactions and these points can be then redeemed for exclusive products and discounts. However, it doesn’t stop there. Certain issuers have collaborations with brands and offer additional exclusive deals on purchases made at those stores. For example, Bajaj Finserv RBL Bank SuperCard allows you to save up to Rs.55,000 annually.
Increase in credit score
This benefit of a credit card is especially important to those with a low credit score or without a credit history altogether. A factor that determines your CIBIL score is your repayment behaviour and credit history, and so, you can use a credit card for this purpose. Making consistent credit card bill payments will add points to your credit score and you’ll see an increase in no time! This will help you secure credit in the future on favourable terms.
These are the benefits that speak for the popularity of credit cards. Besides these, several issuers also give you access to exclusive offers through their various collaborations and this can greatly impact your quality of life for the better. This can be in the form of airport lounge access, special reservations and in some cases, even complimentary amenities. You can enjoy all of this and more when you pick the right issuer and one such option is the Bajaj Finserv RBL Bank SuperCard.
The credit card offers on the SuperCard are some of the best in the market on purchases made for travel, food, entertainment and even utilities. You get to enjoy special discounts, cashback offers and all your purchases earn you reward points, which can add even more value to your future purchases. Additionally, in emergencies you can get an interest-free loan for 90 days on your credit limit and even withdraw interest-free cash from credit card for up to 50 days from any ATM. To apply for this credit card online, all you need to do is check your pre-approved offer and view a customised deal and enjoy instant approval.
“When you invest, you are buying a day that you don’t have to work.”
This quote by Aya Laraya explains the importance of investment in people’s life. The current world presents numerous investment options, and this often confuses the investor. Are you unable to choose the correct investment option? Here is an advice for you:
Add fixed deposits to your investment portfolio. Start your saving with a fixed deposit for yourself or your family. Although it is an age-old investment option, it is still regarded as one of the smartest investment choices. Find the best FD interest rates and choose your plan now. You will enjoy benefits like simple online application procedure, high security of your money with assured returns, flexible investment tenure, etc. Diving into the details, the following are the benefits of adding fixed deposits to your investment lists:
1) Zero risks: Most of the investment plans available in the market are volatile. They depend on the overall economic scenario and the profit of the company. The interest availed at the end of the investment period depends on the profit of the company. Thus, these plans have a higher risk of getting lesser interest, and sometimes your funds may reduce at the end of the lock-in period. This is not the case with FD. The interest rates of FD do not depend on the profit or loss of the company. Rather they are fixed at the beginning of the process. Thus, FD provides a risk-free investment environment.
2) Easy loan against fixed deposits: Once you lock your money in FD, it becomes your asset. You can also avail loan on this FD. The maximum amount of loan that can be sanctioned on an FD is 70% of the FD amount along with a competitive interest rate.
3) Assured returns and High security: Investment options like stock-market, mutual funds, share markets, etc. are subject to higher risks as they are dependent on market conditions. But while investing in an FD, you get 100% assurance of the return of your principal amount as well as pre-decided interest. In an FD, you will be totally aware of the return amount that you will gain after maturity. Thus, you can set your financial goals with greater confidence. Moreover, you can invest any amount under an FD depending on your savings.
4) Flexible withdrawal of funds: In case you are stuck in any financial emergency after investing your savings in FD, there are provisions for withdrawing the money before the FD matures. Though you need to pay a certain amount as a part of the fees, the process is not as complicated as the withdrawal procedures in other investment plans.
Thus, a fixed deposit is a highly flexible and secure investment option. Apart from this, it provides attractive returns. So plan your future by building your wealth through fixed deposits. It acts as a treasure for your financial backup and a shield in the time of financial crisis.
“Invest your money today, build your wealth, and enjoy a happy and wealthy future.”
Around Rs.3.29 lakh crore worth of unsecured loan quantum was disbursed in the last quarter of 2018. Personal loans are easily accessible and available, highly beneficial to meet immediate financial needs.
Even though one can avail a significant amount, the interest rates for such personal loans are higher compared to most other loans. As such, chances of defaulting on these loans are high also.
To avoid such situations, one can consider opting for a loan against fixed deposit. Interest rates are also more affordable compared to those on unsecured loans. One can also opt for loans against the fixed deposit if they do not have a –
- Satisfactory CIBIL score.
- Other assets such as property.
- Do not meet the required eligibility criteria for personal loans.
To avail a loan against fixed deposit, one needs to apply to the same financial institution with whom they have a fixed deposit account. Top financial institutions even offer online loan application facilities.
One can download the application form from their online website. However, you may have to visit the branch to submit the required documents along with the application form.
Accordingly, you should verify the application process as required by your lender.
One needs to submit the following documents while applying for a loan against fixed deposit –
- Receipt of fixed deposit.
- Duly filled in application form.
- ECS mandate.
- Cancelled cheque.
- Other related documents as required by a lender during loan processing.
An individual should note that the ECS mandate and cancelled cheque is required only for non-cumulative fixed deposits.
The eligibility criteria to avail a loan against fixed deposit are straightforward and easy to meet. The following individuals with a fixed deposit account are eligible to apply for a loan –
- Resident and non-resident Indians.
- Organisations including partnership firms, sole proprietorship and group companies.
- Hindu undivided family.
- Clubs and associations.
Other benefits of availing a loan against fixed deposits are –
- The loan can be availed against domestic as well as NRI fixed deposits.
- No processing fees required.
- Furthermore, the loan amount can be repaid in instalments or as a lump sum.
One can also avail other features and benefits on their fixed deposits besides opting for a loan at attractive interest rates.
Features and benefits of fixed deposits
- Online application process – Most financial institutions offer hassle-free online application procedure for fixed deposits with nominal documentation. It enables customers to save valuable time. To apply online, one can visit the financial institution’s official website. Then they have to fill in and submit the online application form along with the required documents.
- Multiple deposits with several cheques – Some financial institutions such as Bajaj Finance allow their customers to pay the amount for several fixed deposits with a single cheque. One can also opt for a different tenor period for separate deposit and fulfil their emergency finding needs by withdrawing cash from any of the deposits before time.
- Affordable minimum deposit amount – One can invest a minimum amount of around Rs.25,000 and earn interest on it and grow their wealth. In this way, an individual who has just started his or her career does not have to wait for a significant amount of time to accumulate a more considerable amount to invest as fixed deposit.
- Systematic deposit plan – Salaried employees can also avail a monthly investment option like systematic deposit plan for saving for retirement. Under this plan, they have to make a small deposit every month, which will be considered as a fixed deposit. The interest is calculated based on the interest rate on the date of the deposit. The depositor can choose the number of deposits that they want to carry out under this plan which can range from 6 to 48. Each of these deposits will have a maturity period of 12 – 60 months. This plan will enable you to increase your retirement savings over time.
Fixed deposits are one of the safest investment options that assure you significant returns throughout. You can also streamline your financial plan by calculating your interest beforehand using a fixed deposit calculator. Opting for a loan against fixed deposit will, therefore, provide you with the emergency funding that you need without putting a financial strain on you.