Thursday, 19 January 2017

You can now take a loan to close your delinquent accounts

Marriage date for Sandeep Tripathi’s only daughter was fixed and as is the case of most Indian weddings, a lot of arrangements were to be made. Sandeep who was averse to credit had never taken a loan and while he did possess a credit card, had never ever used it. However, situation was different this time around and he decided to utilize the credit limit available to him on his card.
But with so many things on his mind he completely forgot about paying the credit card bills on time. The payment became overdue and his account showed an outstanding debt. This brought an immediate dip in his credit score. After the D day when Sandeep was clearing his desk he found his unopened credit card bills. The payments on the 2 cards were 25 days and 95 days overdue. What steps should Sandeep take now for bad credit fix?
As we all know that the payment history directly affects a person’s credit score. Any missed payment is an indicator of credit risk. It signifies that the borrower is not able to meet his current debt obligations and warns the lender that he is a risky candidate. Sandeep had plans of taking a personal loan next year to fund his younger daughter’s higher education. But since his score was less than the minimum CIBIL score for personal loan he would find it difficult to arrange funds in future.
Here is what Sandeep did to get out of the situation.
Most credit card companies do not report overdue accounts until the next billing cycle. Delinquencies are usually reported 30, 60, 90 and 120 days past the due date. The greater the number of missed payment the more severe is the effect on the credit score. After a period of 120 days the account is sent to a collections agency which has a much more severe impact than a delinquent record.
Sandeep pulled out his credit report and saw that while credit card 2 overdue payment appeared, credit card 1 late payment was still not showing on the report. He immediately called the Credit Card 1 company to explain his situation. He requested the company not to report it to the bureau with the promise that he will make the payment within 10 days.
On contacting Credit card 2 co. he found that they were going to send it for collections. He knew that an outstanding debt that was overdue for more than 120 days will have severe consequences for his credit score. The card company agreed to wait for another 30 days provided he made the payment in full along with the interest and late payment charges.
Mr Sandeep wanted a solution for bad credit fix as he was foreseeing a loan requirement in the near future. Late payment records would only ruin his score. He needed the money to repay these overdue amounts and improve credit score. Loans for bad credit score saved him in these difficult times. He applied for a personal loan for low CIBIL score.
Though he had to pay a slightly higher rate of interest, it helped in paying off both the credit card balances. The credit card companies overlooked the short stint of late payment and did not report any delays to the credit bureau. Had Sandeep not taken the loan for bad credit to pay for his past due accounts his credit score would have taken a further hit. It would have made it difficult for him to get credit in future since history of late payments acts as a warnings sign to future lenders.
Personal Loan for CIBIL defaulters helped Sandeep pay off his delinquent account in full. He could convince the card company to remove the late payment record off his account. In this way he was able to avoid a lasting damage to his credit history. Reducing the amount owed gave an immediate boost to his credit score. Sandeep made timely payments on this new loan and within a year he was able to see a significant improvement in his credit score.

Friday, 13 January 2017

Things You Must Know About Supplementary Credit Cards

Credit cards have made our lives a lot easier today- there are no two ways about it.  Before they existed, the only option was to take a loan, which was time-consuming and inconvenient, especially when a small amount of money was required. However, credit cards emerged as the perfect solution for instant loans. Now, whether it is a medical emergency, or funding requirement for a small business, even if it is not the best credit card it comes in handy in any situation.
Apart from a credit card, you can today also get supplementary credit cards for extra comfort. A supplementary credit card is basically an additional credit card which is issued under your primary credit card. You can get these cards for your family members so that they can also enjoy the benefits of a credit card. Different banks have different rules regarding the issuing of supplementary cards, in terms of maximum no. of card allowed to be issued, and associated fees and credit limits.
How Does a Supplementary Credit Card Work?
The thing about supplementary credit cards is that they don't carry a separate credit limit. In other words, all the supplementary credit cards will be payable under the primary credit card, and not separately.
In most cases the cumulative credit limit on the supplementary credits is the same as on your primary credit card. For instance, if your primary credit card has the limit of Rs. 2 lakh, and if you have 2 supplementary credit cards, then each will have a limit of  Rs. 1 lakh each. In other words, whatever is the limit of your primary credit card, it is divided equally among your supplementary cards. The limits are also applicable on your ATM withdrawals.
Another benefit of using supplementary credit cards is that all the transactions are filed under your primary card. Thus, if you are the primary card holder you can monitor all activities on the supplementary cards from your own account.

Advantages of Using a Supplementary Credit Card
A supplementary credit cards holds the same benefits as a primary credit card. However, depending on your bank there may be some changes. Here are some of the most common benefits of supplementary credit cards:
·        Convenience: You can get supplementary credit cards for your parents, so that in times of emergency they can have access to money easily. The same goes for your children. If they are over 18 years of age, you can get them their own individual supplementary credit cards to ensure they don't have to worry about money in future.
·        Cash Withdrawal: Sometimes you need physical currency, when digital money won't do.  In a situation like this you can use your supplementary credit card to withdraw cash from an ATM, just like using a credit card.
·        Expenditure Monitoring: One of the best ways to teach your children about good credit-usage habits is to give them supplementary credit cards. That way you can easily monitor how they use their credit. You can get detailed reports every month, and keep an eye on their finances.
·        Reward Points: One of the many reasons why people use credit cards is to enjoy the reward points they offer whenever you shop with them. Supplementary credit cards also offer the same advantage. With every purchase made with a supplementary credit card you get a certain number of reward points which can be covered into cash later.
How Much Does it Cost to Get Supplementary Cards?

In most cases you can get supplementary cards for free from your bank. However, sometimes you have to pay a small fee for the service. In some cases you may get a certain no. of supplementary cards for free, and for extra you have to pay a fee. One important thing to understand before you apply for supplementary cards is that the primary card holder is solely responsible for the payments of all the supplementary cards. Thus, you must provide these cards only to those who you know can be trusted with them. Falling behind payments can lead to a poor CIBIL score, and marred credit report

Thursday, 5 January 2017

Applying for a Credit Facility is a Child's Play these Days

Credit in any form helps in realizing dreams a little earlier than it would have been possible otherwise. Of course it also eases tough financial situation sometimes or simply helps us to go by with our day to day activities without waiting for the pay day. So whether you are a business man seeking funds to start a business, or you are looking for a car loan or you are farmer seeking some funds to start your sowing there are options available to meet every need. In recent times getting credit has become simpler and easier. Here are a few reasons that make getting credit almost as simple as a child’s play.
Options Galore:
The first thing that makes getting loans simple these days is the vast choice of available lenders. So if you go online and look for lenders for any kind of loan that you want you will be amazed by the overwhelming choice that is available. There are private banks, government banks and co-operative banks that can offer you loan facilities. Apart from that one can avail a loan from the numerous Non Banking Finance Companies (NBFCs) and lenders that are outside the organized market. However borrowing from them is not advisable as they may offer loans and exorbitant rates. So if one is looking for a loan facility they are sure to find a lender that offers them a loan in terms that suit them.
There is choice available not only in terms of the lenders but also the kind of loans available. Thus there are loans that meet any kind of requirement a person may have. There are home loans, home construction loans, loans for home improvement, loan against property, loan against gold, personal loan, car loans (used/new), education loan, and business loans and so on. Thus your choice is great and almost all requirements can be met.
Apart from that there are credit cards that offer the facility of running credit to meet your everyday requirements and some special requirements like holiday expenses that may arise from time to time. Again credit cards come with different features, various credit limits which make them useful in varied conditions.
Customer Friendly Process:
Owning to the large number of players in the market there is a huge competition amongst various players to attract customers. This bodes well for the customers as the lenders will try their best to woo customers and attract the maximum number to themselves to keep up with the growing competition. This also means that banks and NBFCs will try their best to make the lending process as customer friendly as possible. Most of the information is available online; thus even before one applies for a loan they can research about the entire process, check about the documents required and also get an update on the time involved and fees and charges that have to be paid for the loan. This makes the process very customer friendly and an applicant can be fully prepared before applying for a loan.
One has the option for applying for a loan online too; the bank will ensure the process is initiated and the required formalities are completed by sending a representative to the customer. This saves the customer a lot of time and one can apply from the convenience from their home and get representative at a place and time of their choice to complete the formalities.
Approvals are Quick:
Some loans are sought with a lot of planning and one has sufficient time to wait for its approval. However in some conditions the person may require a loan at the earliest like if one were to avail a personal loan in case of an emergency or an agri loan at the start of a crop season. If the personal loan or the agri loan is not received timely in such a scenario then they may lose their utility. Thus getting credit is as important as getting it timely. Lot of major banks have reduced their turnaround times considerably as long as the documentation is proper and the applicant meets the eligibility criteria. Some banks even promise to sanction loans within 24 hours; of course “conditions apply”.
To site an example some time back, HDFC bank, India’s second largest lender in the private sector launched a 10 second, almost real time loan approval and disbursement.
Thus if you have a genuine need, your cibil score is healthy, you have the required documents and meet the conditions as set by the lender then availing any credit facility will be simple for you or as you may say it’s child’s play.

Saturday, 31 December 2016

Learn How EMI is Calculated

An EMI(Equated Monthly Instalment) is a fixed amount of payment you have to make when you take a loan. It contains both the principal amount as well as the interest amount.
You need to calculate EMIs for a particular loan in advance so that you can manage your future expenses accordingly.
How is an EMI calculated?
Here is the basic formula for calculating an EMI:
[P x R x (1+R)^N]/[(1+R)^N-1]
Here P is the loan amount or the Principal, R is the rate of interest per month, and N the number of instalments.
To understand the formula better, consider the following example:
Let the loan amount be Rs. 6,00,000, rate of interest be 10%, and tenure duration be 10 years (or 120 months). Comparing with the formula we have:
P= 6,00,000, R= 10/(12X100)= 0.0083, and N= 120
So, EMI = [6,00,000 X 0.0083 X(1+0.0083)120]/[(1+0.0083)120-1]
EMI= [6,00,000 X 0.0083 X 2.696] / [2.674]
EMI=  Rs. 5020.97
Calculating an EMI using the formula above can be time-consuming, especially if you have several different loans to compare. Thus, using an EMI calculator is a better solution.
What is a loan EMI Calculator?
An EMI calculator is a special tool designed specifically for calculating EMIs. It can save you a lot of time which you would otherwise have to waste by calculating the EMIs for a particular loan using a standard calculator.
How EMI Calculators are Helpful
What is first step you take when you have to take a home loan, or a car loan? Do you start applying for the same right away? Of course not. You have to do some planning first. So, you sit down and do some calculations. You decide how much amount you would need to borrow, and then take the interest rate into account to calculate the approximate EMIs. If the EMI's are high then you will need to either find a bank who can offer lower interest rate, or have to increase the tenure of the loan itself, so that EMIs becomes smaller.
Using conventional EMI calculation methods is a tedious process as it is, but when you have to adjust certain factors such as  the tenure, or the rate of interest, when it becomes an even bigger problem. An EMI calculator is the perfect solution for this problem. Most online EMI calculators are really simple to use. You can get different EMI results almost instantly when you change different factors in the formula. This makes finding the most suitable loan structure easy and quick.
Advantages of EMI calculators
There are many advantages of using EMI calculators, the best of which are as follows:
·        Different Calculators for Different Loans: One of the best things about EMI calculators is that they are specific to different types of loans. For instance, if you want a home loan then you can use a home loan EMI calculator, and if you want a personal loan you can use a personal loan EMI calculator. Since the EMIs of different types of loans have to be calculated differently, an EMI calculator can be used for the calculation of accurate EMIs.
·        Detailed Information: When you calculate EMIs using a pen and paper, or with a calculator, all you get is a final number. However, with an EMI calculator you get a lot more than that. Most EMI calculators give your results in the form of charts and tables which show exactly how much will you be paying every month, along with the reducing principal and interest amount.
·        Accuracy: Even if you are a math genius, you have admit that with pen and paper there is always a margin for errors. When you have do a lot of calculations with different interest rates, principal amounts, and loan tenures, then the risk of making an error is high. An EMI calculator, however is quite accurate.

Whether you are looking for instant personal loans, or distance education loans you have to calculate EMIs for different loan options. If you want accurate results be sure to use an EMI calculator. It will save you a lot of time. 

Friday, 23 December 2016

5 Hacks to Clear Your Debts Fast

No one wants to be burdened with huge debts. However, in today's expensive world, most of us have to take a loan at one point or the other, and with that debt becomes inevitable. If your debt has been accumulating greatly then it is important that you clear it up as soon as possible. Increasing debt can lead to a poor CIBIL score, and damage your creditworthiness. Since there is no instant solution that can work as a bad credit fix, you must take several measures. Only then you can get rid of  your debt and improve CIBIL score. Here are some of them:
1. Debt Consolidation
When your debt situation is getting out of hand, a great hack could be debt consolidation. This is particularly useful if you have multiple loans. In debt consolidation all your individual loans are combined into one, and the final sole interest rate is lower than what you have been paying currently. Thus, debt consolidation helps you in two ways:
·        Since your loans are merged into one, managing expenses becomes easier. You can track your payments easily, and have better control on your money.
·        With a lower interest rate you can save money every month, and pay your debts sooner.
If you want your debts to be consolidated you can simply discuss the same with your bank officials. You have the right to bargain on the interest rate, and you must. If you have been a loyal customer to your bank you stand a good chance of getting an attractive interest rate.
2. Refinancing Your Mortgage
One of the benefits of a mortgage is that you can refinance it to get a better deal. Say you got a mortgage loan at an interest rate of 14%, but after few years the government caps the mortgage interest rate at 13% for all private and public finance institutions. If bank doesn't agree on lowering your interest rate, you can approach another bank who is willing to have your mortgage transferred to them, and let you repay it at a lower rate.
3.Getting A Second Job
Desperate situations sometimes call for desperate measures. If you are really inclined towards getting rid of your debt, then by taking a second job you can drastically shorten the repayment duration. It can be difficult to manage two jobs simultaneously, but once you have fully repaid your personal loan or home loan, you can certainly enjoy the fruits of your hard work. Besides, there are many easy ways to make extra money. If you are good at something, such as coding, or writing, then you can take on freelance based assignments, and make decent money. You can also check if you can make more money by working overtime at your office.
4. Paying More Than Minimum
Most people are unaware of the toll minimum credit card payments take on their accounts. When you make minimum payments, you are not charged any penalties, but the remaining balance is carried over to the next month, and accumulates interest. If you have been sticking to minimum payments since a long time, then it is possible you have been causing your debt to increase without even your knowing it. Thus, to avoid this from happening make sure you pay your credit card payments in full.
5. Getting Help From a Debt Counsellor
Sometimes it is wise to accept your own limitations and take help from someone who has experience with something more than you. You can always consult a credit or debt expert to look into your situation and offer most viable solutions to tackle it. For instance, Credit Sudhaar is one of the leading credit and debt counselling firms in India which can help you with your debt related problems. With the help of someone who has a lot of experience with assorted debt related problems you can certainly get rid of your own debt sooner than expected.
Accumulating debts can put high pressure on you, and affect your life greatly. However, if you are willing to take bold steps then you can certainly tackle the situation. You are also of course free to take external help. A guided approach will certainly facilitate the entire process and make things a lot easier.

Friday, 16 December 2016

It is A Good Idea to Take a Personal loan for an Overseas Trip?

People in India take loans for education, home renovation, medical emergencies, and even for vacations. However, a personal loan for an overseas trip (which can be usually quite expensive) can rarely be a good idea.
Why Does a Personal Loan for an Overseas Trip a Bad Idea?
Most personal loans can be obtained without collateral. You are free to use the loan for anything, and that is a big advantage. However, this advantage comes with a catch- huge interest fees. After all, the lender is granting you a loan collateral-free, thus taking a risk. This is why you have to pay high interest rate for the same.
It is important to understand the difference between good loans and bad loans. Among all possible reasons for taking a personal loan, an overseas trip(especially the one that is purely for fun and leisure) is probably the worst. The reason is simple- the loan you take for an overseas trip/vacation that lasts for 4-10 days have to be paid back with a hefty interest of 14-24% over an year of so. This is an absolutely extravagant transaction that can be easily avoided.
Another reason why a personal loan for a foreign trip should be avoided in because such a loan won't be an appreciated investment. For instance, a home loan, or a car loan are appreciated investments, which gain value over time, and hence improve your credit worth. A personal loan puts you in bad light, especially if you are taking it for an overseas trip. While you are entitled to spend the loan however you like, it may have consequences on your credit report.
 Risks Involved
Even if you are a great planner, and have spend a lot of time planning your trip, you can never predict the future. If you are overseas and your expenses cross your budget you may end up turning to your credit card for help. Since you already have a personal loan to take care of, the credit card bills (which can be quite high when the card is used in another country) can add to the financial pressure.
Another risk that comes with using a credit card overseas, is that if you have reached your borrowing limit, then you can't use the card for paying the personal loan EMI if need be. You can end up in huge debt, which can further make situation worse as it will continue to collect interest. Your credit score will be damaged, and you could end up making it to the CIBIL defaulters list.
The Verdict
If you have to take an overseas trip for a vacation then you should absolutely avoid taking a loan of any kind for the same. However, in some cases taking a personal loan can be fine. For instance, if the loan is of small amount, or the trip begs emergency, then you can take a personal loan. But still, it is best to avoid taking a personal loan at all costs. If possible, you can use your credit card for the same.
If you absolutely have to take a personal loan for a trip overseas, then make sure you take care of the following:
·         Planning: Make sure you get your numbers right before taking the trip. Calculate how much will the trip costs, including a margin for unexpected expenses.
·         Credit Card: Do carry your credit card with you, but make sure you only use it if absolutely necessary. It is easy to be swayed in the spirit of enjoyment in a different country, and you may want to spend on luxuries on a whim. Such ideas need to be controlled, for you will have a debt waiting for you to be taken care by back at your home.
·         Loan Comparison: Do spend your time in comparing all possible options for personal loans. Online lenders generally offer low interest rates on personal loans.

Loans should always be taken for emergencies, or for necessities. If you are taking it for a luxury then you can end up with troubling financial issues. Thus, use them wisely.

Friday, 9 December 2016

What are the Major Credit Reporting Agencies in India?

There are four major credit reporting agencies in India that are recognized nationally. All these agencies collect information of the credit users, calculate credit ratings on that basis, and sell the credit reports for profit. These four agencies are- CIBIL, Experian, High Mark, and Equifax.
Although the primary job of all the major credit reporting agencies is the same, their operation, prices, and systems are slightly different from each other.
Not only CIBIL is the oldest credit information bureau of India, it is also the most popular. It was established in 2000, and has been the most preferred credit agencies by the financial institutions ever since.
CIBIL assigns a score ranging from 300 to 900 to every credit user. The higher is the score, the higher is the creditworthiness of the individual.
To obtain a one-time cibil report and score from CIBIL you have to pay a fee of Rs. 550. However, you can also purchase a subscription for receiving the report 2 to 4 times a year. If you are only interested in your credit report, and not the score, then you can apply for the same for a fee of Rs. 159. You can receive your CIBIL report via email, or you can also get a physical copy at your residence. It depends on the answers given by your when you apply for the report on CIBIL's website.
If there is a CIBIL dispute between a customer and the lender, then the agency offers the facility for a resolution. You just need to fill out a form on their website and mention the details of the dispute.
Equifax obtained its licence for operation in 2010, and is one of the most widely known credit information bureaus of India.
The credit score range followed by Equifax is also 300 to 900. A score higher than 750 is deemed good, and lower than 500 is considered poor. You can get a detailed credit report from Equifax for a fee of Rs. 400. You can also choose to get only the basic report, for which you have to pay Rs. 138. Typically, it takes about a week or so for Equifax to verify your documents and send the report.
If you want to resolve a dispute, you can download the dispute resolution form from Equifax's website and submit it with a few documents.
High Mark
High Mark was founded in 2007, and received a Certificate of Registration from The RBI to operate as a Credit Information Bureau in India in 2010.
The score range followed by High Mark is the standard 300-900. You can obtain your credit report that contains the score as well for Rs. 399. To raise a dispute regarding your score or report you can contact CRIF by filling out a form on their website.
High Mark is a product of CRIF, which is leading global company in the industry of credit reporting and business information. It is operating in 4 countries, and supporting more than 3,000 banks and 44,000 companies.
Experian is also a global information services company that provides data and analytical tools for businesses across the world.
Unlike other credit information companies of India, Experian has a functional score range of 300 to 999. You can obtain your report by paying Rs. 138 either through DD or NEFT transfer. If you want both the report and the score then you have to pay Rs. 399.
To raise a dispute with Experian you can fill out an application form on their website and submit certain documents for verification.
Although there are multiple credit information companies in India, they are essentially the same. However, since most banks and other financial institutions rely on CIBIL score only, that's the one you should generally refer to. It is the most prominent credit bureau of India, and its processing of applications is also really fast.
No matter which credit bureau your lender prefers, having a high score is a must if you want a loan, or a credit card. If you want to improve CIBIL score fast, by either taking a home loan, education loan, etc. then you can always take professional help from an reputed agency such as Credit Sudhaar.