5 factors to keep in mind before transferring home loans

Are you paying high-interest rates and charges for your home loan? Is a high EMI piling on your monthly income? Those who feel the interest rates are too high or the EMI is a burden can choose the option of the home loan balance transfer.

Refinancing or transferring housing loan can help you avail lower interest rate. Thus, making the EMIs affordable. Before moving the outstanding amount to a new lender, you have to read the rules and regulations of the existing lender as to when can you move your amount. Some prevent transferring of the loan to a new lender. 

In case, the clause mentions prevention of balance transfer, then re-negotiate the interest rate with your existing lender. 

And those whose lenders allow home loan balance transfer should remember the following factors: 

1)      Check if the lenders are offering affordable interest rates. Thorough research does no harm

2)      The timing of balance transfer is crucial. If you switch your lender in the second half of your tenure, it becomes worthless as you pay most of the interest rate in the initial stage of the loan tenure. It is better to transfer in the earlier half. That way you can avail the best rate

3)      Track the record of the new lender. There are several banks and financial institutions who are ready to offer lower interest rates, thanks to the rising competition in the market. Each lender has built a certain reputation in the market. So, before switching your home loan lender, learn about their services

4)      Check the loan transfer cost. Moving your loan from an existing lender to a new one can include additional costs such as processing fee, application fee, prepayment charges, and legal fee. In most of the cases, existing lenders only charge you for the transferring of the loan amount

5)      Once you move the loan, you are bound by the terms and conditions of the new lender. Surely, low-interest rates can be eye-catchy. Ensure that you earn the necessary benefit by moving the outstanding balance to a new lender 

Considering the above pointers, you have to take time and make a decision as to whether you want to transfer the housing loan balance to a new lender. Understand the pros and cons of the whole process. 

If it does not serve the purpose of long-term benefit, do not opt for home loan balance transfer.

5 ways to improve two wheeler loan eligibility

The need for owning a vehicle in today’s world is extremely essential for individuals who travel long distances on a daily basis. Public transportation can become cumbersome for individuals who already lead a stressful life and hailing a cab can be an added financial expenditure to an individual’s life. Buying and owning a vehicle will be an essential way of travelling. When the customer owns a vehicle for transportation they reduce their dependency on public transportation, which will also reduce the expenditure and help them save. Thus, buying a bike will be the best option for a customer to handle travelling. The customer who wishes to purchase a bike can go for a bike loan.

A two wheeler loan is a loan product that is provided by financial institutions to individuals who wish to buy a bike. In a bike loan, the financial institution will provide the loan amount to the customers for helping them with the purchase of the loan. Financial institutions provide the bike loan to the customers at a certain interest rate. The repayment of a bike loan is done through equated monthly instalments. Repayments done through monthly instalments help the customer in making the repayments on the loan gradually and easily. Generally, the interest rates provided on a bike loan are fixed interest rates. In a fixed interest rate, the customer has to pay a fixed amount for the complete tenure period of the loan. Customers can opt for a bike loan for both a new bike or a secondhand bike.

5 ways to improve eligibility for a two wheeler loan

1.      Age:

Financial institutions need to make sure that the customer would not have any type of problems in making the repayments on the loan. Thus, it is advisable that a customer should opt for a bike loan when they are at an early age, as they would be earning a monthly income. The customer would not face any problems in making the repayments on a bike loan while they are earning a monthly income.

2.      Income potential:

The repayment capacity of a customer on the bike loan is an important factor for availing a bike loan. Individuals who earn a minimum level of income are also eligible for the loan. The customers need to have a certain minimum income potential for being eligible for the bike loan.

3.      Work experience:

If the individual availing the bike loan has work experience, their eligibility for the loan increases as it provides the financial institution with the assurance that the customer will be able to make the repayments on the bike loan without facing any type of problems.

4.      Credit history:

Before providing the bike loan, financial institutions conduct a background check on the credit history of the customer. Any outstanding debts or any failures of repayments on the loan will reflect negatively on the customers side. Thus, it is advised that the customer improve their credit history before opting for the bike loan.

5.      Employment:

Opting for the bike loan while being employed will improve the customers eligibility for the loan. Since they are employed, they will be earning a monthly income and thus would not have problems in making the repayments.

Benefits of taking a student loan

The cost of securing a good quality education is going up with every passing year. Whether you choose to go abroad to pursue a higher degree or attain one in India, it is becoming increasingly difficult for parents to fund their children’s education. Despite saving for years together, parents find it tough to spend money on the ever-rising fees for medical, engineering, chartered accountancy, journalism, law and several such coveted professions. As a result, most parents take out education loans on behalf of their children. However, there are many benefits of taking out a loan to fund your higher education. Let’s take look at them.

The loan is applicable for all kinds of courses: It is possible to take out a loan to pursue all kinds of courses and degrees. Whether you need a loan to complete your graduation degree, your post-graduation, a vocational course or even a diploma, you can opt for a student loan. Furthermore, it does not matter where you wish to study –in an Indian university or a foreign university abroad; banks offer the loan as long as you can provide proof of admission and can demonstrate a good academic record.

Anyone can take a loan: Every student aspiring to pursue higher education has the right to apply for this loan. In fact, the Indian Government has made special provisions to this effect. According to a mandate by the Government, students belonging to the economically backward sections of society can apply for education loan from government-controlled banks under a subsidy sponsored by the government, through which low or subsidised rates of interest are offered on the loan. The ‘Central Scheme for Interest Subsidy’ is one such scheme launched by the government. 

The loan is available easily: Since loans for higher education have the backing of the Ministry of Human Resource Development (formerly known as the Education ministry) there is an increased availability of this loan. According to RBI guidelines, this loan is considered a priority product across all banks in the country, so as to afford an equal chance at education to everyone. 

You can choose a loan amount depending upon your course: Every bank in India offers various student loan amounts. You can get a student education loan of ₹2 lakhs as well as ₹10 lakhs, should you wish to pursue your higher education in India. Students hoping to go abroad for their studies may get a high amount loan of up to ₹20 lakhs. Furthermore, you need to provide collateral only if your loan amount exceeds a certain amount, as per the lending institution’s guidelines.

 
It covers a wide range of expenses: Your education loan not only covers your tuition fees but also factors in all the expenses related to your course, be it the cost of equipment (for engineering students, for instance), student-union fees, fees for extra-curricular activities, notebooks and textbooks, library charges etc. It also covers your boarding and lodging expenses, dormitory expenses, travel and other associated expenses, during the term of the loan.

Everything you need to know about the Pradhan Mantri Awas Yojana Scheme

One of the most prestigious projects launched by the Government of India, the Pradhan Mantri Awas Yojana housing for all scheme has become the talk of the town since its inception in June 2015. The project is one of the most futuristic projects ever launched by the Indian government, with the mission to eradicate slums and provide people with a ‘pucca’ or cemented house, especially in the urban areas of every city in the country. Without further ado, let’s find out all the important things you need to know about the scheme.

Highlights of the scheme

Below are the main highlights of the PMAY scheme.

• Eco-friendly, sustainable technologies are to be used for constructing the houses
• The scheme provides beneficiaries with a subsidized interest rate of 6.5% on housing loan, with 15 years tenure.
• Senior citizens and differently abled individuals will be provided special preference when it comes to allocation of flats on the ground floors.
• All the urban areas within the country are covered in this scheme, including the 4041 statutory towns. The first priority will be extended to the 500 Class I cities. This is to be done in 3 phases.
• The credit linked subsidy scheme is to be implemented across the country in all the statutory towns, from the very first stage.

Objectives of the scheme

The main objective of the scheme is to make housing affordable for everyone by the year 2022

• The scheme especially aims at providing affordable housing to people belonging to the economically weaker sections of the society, women serving as bread-winners of the family and members belonging to scheduled castes, scheduled tribes and other backward classes.
• PMAY is also meant to benefit additional demographics such as widows, members of the transgender community and other members belonging to lower income groups, who are typically ignored.
• In order to benefit from the scheme, registrations are made mandatory by the government.
• The scheme is aimed at targeting urban areas within the states and union territories of the country.

Eligibility under the scheme

The following are the main beneficiaries under the Pradhan Mantri Awas Yojana Scheme

• Economically weaker sections (EWS): Individuals with an annual household income below ₹3 lakhs
• Light Income Groups: Individuals with an annual household income above ₹3 lakhs but below ₹6 lakhs
• Medium Income Groups 1 (MIG1):  Individuals with an annual household income below ₹12 lakhs
• Medium Income Groups 2 (MIG2): Individuals with an annual household income above ₹12 lakhs but below ₹18 lakhs, looking to construct a house
• Minorities: Members of SC, ST and OBC groups who can provide caste certificates and relevant income documents
• Women: Women belonging to LIG or EWS categories

Home loan interest rates under the scheme

The current home loan interest rates offered by banks is of 9% per annum. However, with a 4% interest subsidy, on a loan of ₹9 lakhs, one can get an effective interest rate of 5% under the Pradhan Mantri home loan scheme.

Questions to ask when taking out a personal loan

In today’s day and age, it has become increasingly easy to get a personal loan. So much so, that you can apply for personal loan online, without even stepping into a bank. Moreover, you can use the loan amount for a huge plethora of reasons that you needn’t specify to the lender. As long as the bank is convinced that you demonstrate good credit repayment behaviour and have the capacity to repay the loan amount, your personal loan can be sanctioned instantly. Here are a few questions you should ask when taking out a personal loan. 

Q1: What are the reasons for taking a personal loan?

Answer: You can take out a personal loan for several reasons; whether you need money for a financial emergency, whether you need it for hospitalisation or even for recreational purposes. Personal loans are provided for funding lavish weddings, luxury vacations, home renovations and even debt consolidation. You can also take out a loan to invest in your business or put a down payment on your new home. 

Q2: Can I apply for personal loan online? How can I do so?

Answer: Yes, you may apply for a personal loan online. Simply visit the website of the lending institution, for instance Bank of Baroda; fill out the online loan application form, submit your credit scores and attach scanned, soft-copies of the necessary documents. If the bank is convinced that you can repay the loan amount, your loan will be sanctioned and disbursed easily. 

Q3: What documents must I submit will the loan application?

Answer: Personal loans do not require detailed documentation. You must provide the basic, minimal documents such as your identity proof, address proof, employment proof, and salary statements of 3-6 months along with bank statements and proof of income tax returns filed. In case you are self-employed or own a business, you have to provide documents related to your business. People who apply for the loan online may submit soft copies of the documents, whereas those who approach the bank must submit photocopies. If the bank is satisfied with the documents provided by you, you can even expect instant personal loan approvals.  

Q4: What makes me eligible for a personal loan?

Answer: To be eligible for the loan, you must prove to the bank that you have a regular source of income. You could be a salaried individual, a professional or a self-employed entrepreneur owning a business. Banks also consider the company you are employed with along with your credit history, credit scores and your residential location to consider you eligible for the loan.  

Q5: What is the typical tenure of a personal loan?

Answer: Every lender provides different tenures to repay the personal loan. However, most banks typically offer tenures of 12-60 months for repaying the loan. In a few rare cases, you may be allowed to take out a shorter or longer tenured loan, depending upon the case made by you.