Friday, 30 June 2017

Which home loan is popular? Why?

Buying a house and making it their home is a dream of every individual, and home loans are the way to get to your dream home.
In India the demand for Home loans are rising on a daily basis due to many factors such as affordable homes in many township projects, Government subsidies for first home, tax benefits and also competitive interest rates by various banks and non-banking financial companies. Today customer is the king to afford and avail various benefits for buying his own home.
Every day ample number of people apply for home loans, some pass the door of dreams when their loan gets sanctioned, but many are pulled back because of low cibil score.
It is very important to check your cibil score before you undergo the process of availing any loan. Cibil score calculations can be done by various mediums and if your cibil scores are low than the eligibility score, then to avail a loan you will have to wait for some more time to get your dream home.
Buying a home takes years of planning, savings and patience. Imagine you thinking this is the right time to buy a home and you are being let down by your cibil score calculations.
There are different types of loans you can ail in this vertical,
1.       Loans for home purchase
2.       NRI home loans
3.       Loans for home construction
4.       Loans for land purchase
5.       Home Improvement Loans
6.       Home Expansion Loans
7.       A loan for home conversion
8.       Balance transfer loans
9.       Stamp Duty Loans
10.   Bridge Loans
Once you have an idea about your cibil score calculations and decided which type of loan you want to avail, the next step would be to choose from where you shall avail the loan. There are different banks like HDFC, AXIS Bank, ICICI and Non-banking financial services firms like Indiabulls. They all have different services and offers they provide in regards to home loans and products related to home loans.
One can easily get in touch with the bank directly or take assistance from the vendor you are purchasing the house from. It would be suggested to do a thorough research on the home loan market offerings which would suit your criteria’s to avail a loan.
There are some points which you can consider while availing a loan:
Healthy CIBIL score is the key
As we all know good cibil scores leads to fast processing, the lender can reject your application if your cibil scores are low. Make sure you make your payments on time so that they don’t reflect on your cibil ratings.
Poor credit scores will delay your home loan
As explained earlier low cibil scores will delay your chances to avail a loan and will postpone your dream to get a home. Traditional banks may reject your application but you can still try getting the loan processed by an NBFC like Indiabulls home loans at a bit higher interest rates.
Always choose lower interest rate
You have many banks and NBFCs which can offer loans and there are many websites as well which will provide you with all the information on home loans and various interest rates to offer, so choose your lender wisely as taking a home loan is a long term commitment.
Types of interest which suits you
As there are many types of loans, also there are types of interests i.e. fixed and floating. A fixed interest rate will be fixed throughout your loan tenure and floating will fluctuate according to financial market trends, many avail floating interest rates as it gives a flavor of uncertainty and you can benefit your pocket when the interest rates are low.
Foreclose your home loan if you can
It would be suggested to consult an expert to foreclose the loan, as tax benefits, appreciation on the property, etc. make sure you have done your due diligence before you take this step as sometimes this could lead into a minor loss.
Home Loan is a long-term commitment so don’t get trapped by various market offerings and choose an appropriate home loan product after due diligence.

So, A better home loan would depend on your credit score, better deal offered to you, interest rates and the final tenure. Always make sure that what you are going for is the prefect purchase for you!

Friday, 16 June 2017

Unexpected Things that May Cause a Hard Inquiry

Your credit score reflects your financial health. Maintaining a good score is indeed the first step to stay credit healthy forever. Apart from regular repayments and maintaining appropriate credit utilization ratio, certain factors such as the length and mix of credit accounts besides hard credit queries also impact the CIBIL score.
Hard credit query is basically a footprint being made by a bank to check your loan eligibility and credit worth. Frequent hard inquiries on the credit report reflect credit hungry behavior of the prospect and thus it hurts the score.
Why does bank make a query? The purpose of making a query is to make a note on your report about your financial activity. Not only does it record your financial moves but it also saves your from identity theft or other fraudulent financial moves. As long as you could recognize your credit activity you could be assured of complete security of your account.
Besides being vigilant about loan repayments and maintaining zero balance on your credit bills, it is thus also important to ensure that unnecessary queries are not made to the CIBIL.
Even if you are planning to avail a loan you should conduct CIBIL Score Check yourself by pulling out free CIBIL report save a hard credit check by the bank.

But sometimes even the smartest of people make silly mistakes and hurt their score. Despite being careful about each of their financial moves they unknowingly cause a hard inquiry. Let’s find out some unexpected things that may cause a hard inquiry on credit report and affect the score.
Paying your taxi’s fare with a debit card
This is one of the most unsolicited reasons for making a credit check on your CIBIL report. Most of the popular cab services allow you to pay with a credit card or a mobile wallet. However there are few who allow you to pay with a debit card even. Those invite debit card payments often have a clause that allows them to make a credit query on your report. Any such inquiry if undertaken would be hard one.
While applying for utility services such as mobile phone plan or cable connection
When you apply for services such as a cable TV connection or a new cellphone contract, it can initiate a credit check. The objective behind such credit checks is to evaluate the stakes. The query is meant to check your credit worth and ensure that you could repay the bills on time. The credit check thus is a hard query.
When you request for increase in a credit line
By requesting an increase in a credit line, you would successfully reduce the total limit being used and it will boost your low CIBIL score. But at the same time, the request to a bank to initiate the limit would cause a hard query on your account.
Here you should also know that all requests made for increasing credit limit are not hard ones. For example, when a credit card company offers a random increase in the limit it does so after making a credit check. But without your knowledge the check would be considered as a soft query.
When you apply for a new credit card via an employer
Many companies ask their employees to have a corporate credit card so that they could cover business-related expenses on the run. However employees fail to realize that it could initiate a credit query. The companies ask employees for a personal guarantee. The purpose behind is to ensure that the employees are worthy enough to pay the pending bills on time. This causes a hard inquiry on the report.
Credit check before a new job
There are some jobs that require a complete history check before accepting the candidature. These jobs also include a credit inquiry so as to establish your financial history. One example for the same could be a bank’s treasurer job.
Before finding a rented accommodation
Many landlords ask for credit check before offering their home to tenants. In order to know your credit score you should seek a free credit report from CIBIL. Every year CIBIL provides a free credit report.

All in all, before using many of the utility services a credit inquiry could be started. So you should be vigilant enough to ask the service provider to initiate a soft credit instead. A soft query is the one that doesn’t add a mark on your credit report and its presence doesn’t hamper your score.