Friday, 27 January 2017

How Education Loans Are Changing the Fate of Students

Quality education, irrelevant of the domain, is extremely important. In a country like India where hundreds of thousands of students compete for limited jobs, the education background can make a big difference. Unfortunately, a lot of times sharp-minded scholars are unable to proceed with their admission procedure despite securing seats in some of the most reputed Institutions of India and abroad. The reason? Lack of enough funds to pay for the college tuition. However, education loans are slowly becoming the best solution for financial issues like these. These days, not only education loan procedure has become simpler, but the interest on education has also become affordable.
Here are some of the most amazing ways a higher education loan is changing the life of the students for the good:

Easy Education Accessibility
One of the most significant ways education loans have changed the life of the students, is by making quality education available to them despite of high costs. A meritorious student thus has to no longer limit himself to substandard colleges and other education institutions due to financial problems. If a student is laborious and ambitious to establish a promising career he can easily get an education loan to pay for college tuition that is far from the reach of his parents.
Easy Availability
There are a number of government and private finance institutions that offer education loans for all kinds of courses and certifications. Thus, whether you need an education loan for MBA, or an engineering degree you can easily get it as long as you have a promising academic record. It also helps if the applicant has a CIBIL score higher than 600, which is considered above average. As for the loan itself, your loan papers get approved within just 2-4 weeks in most cases. 
Interest Rate Benefits
One of the best advantages of education loans is that they come with lower interest rates in comparison to other kinds loans. Sometimes the government also provides subsidy for the benefit of the meritorious students. For instance, if the loanee is female then they get an additional concession of 0.5% on their interest rate. Plus, if the loan amount is below Rs. 4 lakhs then you don't even have to provide any kind of collateral, and there is no margin to be paid.
Repayment Abeyance
Another major advantage of taking an education loan is that you can enjoy the moratorium period. You have to start repaying your loan only when it has been an year since you graduated, or six months since you started a job.
Education loans are quite helpful to students- there are no two ways about it. However, despite their benefits they do have some disadvantages as well. Here are some of the most prominent ones:
Tough Eligibility Criteria
Although the merit of the student plays a vital role in the approval of their loan application, sometimes that's not enough. Most banks consider many other factors when evaluating an education loan application. For instance, if the applicant has a history of defaulting or CIBIL dispute, or has poor credit score then their application may be rejected.
Repayment Pressure
Often there is some level of pressure on the student who is pursuing their education by taking a loan. After they graduate, getting a job becomes almost crucial lest the lenders starts pressurizing them for repayment. The same can happen if some for reason the student is unable to finish their college on time. When there are co-applicants involved (usually the parents), then there is pressure on them as well. Failing to repay on time can damage their CIBIL score apart from the student's.

All in all, education loans may be tricky to deal with, but can make someone's dream come true when all the other doors are closed for them. There are so many laborious students who come from poor families, and when they are unable to fund their higher education themselves they can take a personal or education loan to make it possible. If you are going to apply for an education loan yourself make sure your CIBIL score is decent. If your score is lower than 600 then it is best to improve it first. This will greatly improve your chances of loan approval.

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.