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Here’s How You Can Actually Reduce Your Home Loan Interest Rate!

Your equated monthly instalments (EMI) amount is based on a few core factors like loan amount, tenure chosen and interest rates. While you can pick your tenure and loan amount yourself, interest rates are levied by lenders. However, your interest rate has a significant impact on your home loan EMI. If you get a higher interest rate, you are bound to have a higher EMI. Therefore, you must try to reduce your home loan interest rate while applying.

Here are some ways through which you can reduce your home loan interest rates.

  • Choose lender carefully

You must choose your lender carefully. Not all lenders offer the same interest rates. Some lenders offer the lowest home loan interest rates in the market, provided you fulfil the eligibility. You would need to do some research to check a lender that helps you reduce your interest rates. Opting for lenders that help you restructure your loan and tenure can help you decrease your interest rates during the tenure. In addition, you must note which lender transfers the cut in repo rate to the borrowers. Consider the different home loan interest rates before applying for a home loan.

  • Check your credit score

Your credit score can help you reduce your interest rates. However, for that, you must have an excellent credit score. Lenders usually offer a low interest rate for borrowers who have a credit score of 700 or above. Before you apply for a home loan, check your credit score and fetch your credit report. In case of a low credit score, you should defer applying for a home loan until it is improved. Moreover, if there are any discrepancies in your credit report, request the credit bureau for rectification.

  • Opt for transfer balance

If you find a lender offering lower interest rates, you can opt for a transfer balance. With a home loan transfer balance, you can switch your loan and save on your interest outgo. However, ensure that the difference in interest outgo is substantial, as only a slight difference might not help you save against the cost of the transfer balance. Therefore, it would be best to do a cost-benefit analysis, comparing the total cost and gain of transfer balance before making the switch.

  • Change interest type

Fixed interest rates are usually charged higher than floating interest rates. Therefore, if you have opted for fixed interest rates, you could be paying high interest rates. You can switch to a floating interest rate to reduce the interest rates. Moreover, the home loan interest rates are historically low, but its benefit can be availed only if you have a floating interest rate. You can make the switch with the same lender or with a different lender. However, ensure to do the calculation to know the savings it will help you do.

A high-interest rate can make you spend a high EMI every month, impacting your personal finance. However, these tips can help you save money by reducing the housing loan interest rates. Apply for a home loan today.

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How ‘buy now pay later’ differs from personal loan?

Ecommerce websites are finding newer avenues to lure customers into buying stuff. While discounts, deals, and cashback have become more important than ever, ‘Buy Now Pay Later’ has been introduced by several online sellers to make life easier for buyers. With BNPL, you can purchase the product of choice even if you are short on funds and pay the entire sum at a later point in time.

Although this sounds like an exciting proposition on the part of the online sellers, the concept here resembles a credit card more, instead of a personal loan. BNPL, without a doubt, is slowly emerging as one of the most sought-after online payment schemes and it might not be surprising to see it capture 9 percent of the payment-specific market scheme by the end of 2024.

However, you can even get a personal loan to buy a product of choice, which is an entirely different approach as compared to the BNPL.

How do Personal Loan and BNPL differ?

  • Loan Value

As mentioned, BNPL doesn’t offer cash in hand and is only meant to ease your eCommerce purchase. Therefore, if you want products valued at less than Rs . 1 lakhs, BNPL can be a reliable option to consider. However, a personal loan puts cash in your hands and is the best way forward if you need a bigger sum to manage concurrent expenses.

  • Repayment

Here comes the tricky part that drastically separates these two credit availing schemes. BNPL requires the borrower to pay out the sum within 15 to 30 days, in full. However, if the amount is a sizable one, you can even opt for a 3-month EMI scheme. Personal loans are way more flexible in this regard as you can borrow the sum and select the repayment tenure at 12 to even 84 months, depending on the EMI value you wish to pay.

  • Interest Rates

Personal rate interest rates are fixed. This means, your EMIs will be calculated as per the interest rate agreed upon with the lender in the first place. However, interest calculation can be a tad complex when BNPL payments are concerned. If you plan on paying the sum within the stipulated time frame, the lender doesn’t charge any interest.

However, for delayed payments, the interest rates are more like the revolving credit card liabilities.

  • Goals

As far as the requirements are concerned, BNPL is mainly used to purchase premium goods by paying nothing upfront. Personal loans, however, are more conducive to handling emergencies like house renovation, marriage, higher education, and more.

In addition to these differences, procuring a personal loan and a BNPL facility are also dissimilar when it comes to documentation. Unlike a personal loan that requires several authenticating documents, BNPL depends on your eligibility, eKYC, and credit score.

Bottom-Line

While a BNPL is quite effective and rewarding, it is advisable to get a personal loan for managing scenarios more complex than shopping online. However, if you are confused regarding lenders, pick one at the Finserv MARKETS and get the best deals on any lending scheme.

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How to Get a Personal Loan When You Have Bad Credit

A bad credit score should not hinder you from getting that personal loan to take care of an emergency or consolidate your debts.

 However, you have to put in a lot of work to qualify for these loans, especially if you don’t have a credit history.

Here are a few steps you should consider to get a personal loan with bad credit.

Improve Your Financial Health

If you’re not taking a loan to respond to an emergency, then begin by improving your credit score. This will enable you to afford the loan that you want.

Improve your creditworthiness by paying your bills on time. Ensure the balance on your credit cards is less than 30 percent.

After that, don’t apply for any new credit. The combination of these factors, ranging from on-time payment, no new credit to low credit utilization, will account for 75 percent of your credit score. You’ll not be at 100 percent yet, so you need to move to the next step.

Check Your Credit Score

Lenders have a minimum credit score requirement, so they can reject your application if you have a lower score than their minimum. Also, you’ll find lenders who see it as a business opportunity to offer you a bad credit loan. These bad credit loans come with a higher origination fee and interest rate.

You’re entitled to access one free credit report. So take advantage of that and check your credit report from AnnualCreditReport.com.

Although the report won’t include your credit score, you can still purchase it from the credit bureau or get it free from some financial institutions. If you find any error in your report, get it fixed to improve your creditworthiness.

Get Loan Pre-Qualification

Many personal loan lenders would want you to submit a prequalification before contacting a personal loan Montreal lender.

Prequalification allows the lenders to find out if you can qualify for a loan. They’ll also see if they can offer you a loan without hurting your credit. So take this as an advantage before you apply for a loan.

With prequalification, you can determine whether you qualify for a loan or not, so you know what to do. You can also compare different loan offers that are available online and from some banks.

Add a Co-Signer to Your Application

With a co-signer, you can easily qualify for a loan and get a lower interest rate loan. This is possible because a co-signer’s credit and income information are added to your application.

A co-signer must agree to pay the loan on your behalf if you default.

It’s important to discuss all your loan details and agreement with your co-signer. A co-signer should be able to understand their involvement in your loan terms before agreeing to co-sign.

Research the Available Lenders

As you do your research, try to compare lenders since not all lenders have the same borrowing requirements. Their rates and charges are also different. Compare many options available.

A bad credit lender will offer you an affordable rate. They also offer other important features such as credit-building tools, fat funding, and a mobile app to help you manage your loan payments.

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Loan

Banks vs NBFCs – Different Home Loan Variables Explained!

Home loans are long term financial commitments that can span up to decades. Therefore, you must do adequate research on different housing loans to find the one suitable for you. While the home loan interest rate should be a vital determinant of your choice, you must also consider the services offered by a lender and the convenience of dealing with them. To do so, you might have to make one crucial choice – bank vs NBFCs. It could get confusing to pick one of the two. Though they may seem similar on the surface, there are differences between them, which affects your overall home loan experience.

If you are planning to avail a home loan, here is a small guide on banks vs NBFCs to help you make the right decision.

Banks

Banks in India are regulated by Reserve bank of India. Here are the advantages of availing a housing loan with a bank.

  • Overdraft facility

Banks provide you with an overdraft facility on a home loan. Your home loan is linked to a bank account where you can park your surplus funds. The funds over and above the EMI amount are considered as prepayment, reducing your interest outgo and total borrowing cost.

  • Transfer of interest rate changes

RBI has made it mandatory for the banks to follow the marginal cost of funds based lending rate (MCLR) regime for home loan interest rates. With this regime, banks usually transfer the change in interest rates faster to the borrowers.

However, the stringent home loan process and documentation of banks often leads to delay in home loan approval and disbursal for borrowers. Also, if you have a low credit score, you might not be able to avail a home loan with a bank.

NBFCs

National Housing Bank (NHB) governs non-banking financial companies or housing finance companies. NBFCs have to procure certificates from NHB to lend home loans.

  • Higher loan amount

Based on your eligibility, NBFCs usually sanction a higher loan amount. In addition, they include stamp duty and registration charges of the property in the home loan amount.

  • Easier processing

With a relaxed home loan process, you can get a home loan with an NBFC quickly. You might also get a home loan with a lower credit score from an NBFC. NBFCs also have a lesser documentation process. So, if you are unable to get a loan from a bank due to its stringent process, NBFCs can be of great help.

However, keep in mind that NBFCs usually charge higher interest rates.

Summary

Amidst the plethora of options available, it is better to weigh the features of the bank and NBFC while making the decision. While with NBFCs, you might get a higher loan amount, they usually charge higher interest rates. On the other hand, banks have a complicated documentation process and require a high credit score. Therefore, it would be best to assess your needs and then make a decision. If you have a low credit score but are in search of a high loan value, you can opt for a loan from NBFCs. However, if you wish to have an overdraft facility and low interest rates, banks could be a better option for a home loan.

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How to Get a Home Loan with Minimal Documentation?

The enormous price hike in the real estate market has prompted many homebuyers to avail a home loan for purchasing a property. With reputed lenders, it’s possible to avail a housing loan through a hassle-free online application process. Simple eligibility criteria, minimal and paperless documentation have further encouraged a great number of homebuyers to apply for a housing loan.

If you too are looking for a housing loan, you must keep all the necessary documents handy. This will reduce the processing time, and help you avail the loan amount within a short span.

Some of the important documents required for a home loan are mentioned below:

Documents Required for Home Loan

  • Passport size photograph
  • Identity proofs- PAN Card/ Aadhaar Card/ Voter ID
  • Residence proof – Passport/ Voter ID/ Driving Licence/ Aadhar Card/ Electricity Bill

In addition to the above-mentioned documents, you will also have to furnish the income proof as follows:

For salaried applicants

  • Salary slips for the last three months
  • Form 16 and Income tax returns for the last two years
  • Original six months bank statements
  • Original six months bank statement of any other bank account
  • Details of any existing loan availed along with its track record.
  • Property documents
  • Sanction letter

For self-employed applicants

  • Bank statement/passbook for at least past 1 year
  • Bank statement of last 1 year of any other bank account. The bank details must contain the account holder’s name, account number, bank name, and branch.
  • Last 3 years profit and loss account and balance sheet certified by a Chartered Accountant.
  • Degree certificate
  • Last 3 years Income Tax Returns, including your Business’s IT returns.
  • In case you have a partnership firm, you will have to provide registered partnership deed.

Make sure to keep these documents handy before starting your loan application process. Apart from verifying these documents, the lender may also evaluate various aspects such as your credit score, monthly income, job profile, employment history, etc. while determining your home loan eligibility. You can boost the approval chances of your loan application by minimizing your debt-to-income ratio and improving your credit score before beginning the process.

Once your home loan is approved and the loan amount is disbursed, it should be your prime responsibility to make timely loan repayment. Make sure that you do not delay or default on your EMI payments. You can make use of an online home loan EMI calculator to get an estimate of your monthly instalments. It’s advisable to settle for an affordable EMI, as it will help you repay the loan without straining your finances.  If you have a high repayment capacity, you must consider opting for a higher EMI outgo. This will allow you to close your loan sooner and save on the total interest pay-out. In case of any query while applying for a home loan, you can seek the help of a financial advisor for making a well-informed decision.

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Tips for applying for home loans when you are self-employed

Many banks and financial institutions have a streamlined process for home loans that are similar for salaried and self-employed individuals. However, when it comes to your income and employment, the eligibility criteria differ. This is because the nature of income and its stability are different.

They ask for a varied set of home loan documents required to fulfil the set parameters. You also get the loan amount sanctioned differently than salaried professionals. It is best to check the same with the home loan eligibility calculator. If you are confused going into the process due to separate parameters, read on to find out what you need.

Documentation: The paperwork for the loan process consists of personal identity proof, resident proof, age verification, banks statements of the last six months, a professional practice or business certificate, tax returns of the previous two years, proof of business continuity, profit and loss statements, etc. These requirements vary from lender to lender. However, it is best to stay prepared with the standard documentation to calculate home loan eligibility with ease.

Stability: Lenders evaluate your income based on the past two years’ performance or your business or professional practice. They are concerned not only about your earnings but its feasibility. They want to see the tangible profits you produce to gauge the longevity of your entrepreneurship.  This is why most start-ups struggle with being eligible despite backable funding. So, make sure you have sustainable revenue to show for your home loan eligibility.

Tax returns: Inconsistent tax filing is a norm if you have a small-scale business without a proper auditor. However, not only does this affect your financial statements but also your home loan application. To satisfy eligibility for home loan, you should have filed tax returns properly for the past two years of application. You should also have all the documents required to prove the same. So, make sure to stay up to date with your filing and avoid delay.

Good credit history: This remains the top priority for lenders for sanctioning loan to all applicants. It becomes even more prudent for self-employed as there is a frequency of debts involved. They finalise your home loans eligibility by evaluating your credit history. They analyse your credit score, which should be 750 or above. They also look at your repayment patterns from the credit report. It is advisable to pay off debts that are written off to sustain a healthy rating.

Most of the parameters remain the same. However, your maintenance of profit and loss statements and other financial documents is essential for a smooth loan process. The lenders scrutinise your applications with stringent terms due to fluctuating income. It is best to create a solid financial standing to counter such concerns.

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Top 5 Mistakes to Avoid Before Opting for Loan Against Property

A Loan Against Property can be of great help when you require a large amount of money. It is basically a secured loan, wherein you can mortgage the property to the lender in order to borrow the loan amount. Since it is a multipurpose loan, the loan amount can be utilized for various purposes such as funding your child’s higher education, managing his/her wedding expenses, etc. In case you wish to apply for a Loan Against Property to fulfil your monetary requirements, ensure to avoid these critical mistakes as they can cost you dearly in the long run.

Avoid These Mistakes before Availing a Loan Against Property

  1. Not checking your loan eligibility

Your loan application will be approved only if you satisfy the eligibility criteria set by the lender. You can check your eligibility using a home loan eligibility calculator. Not checking your loan eligibility before applying for a Loan Against Property can lead to the rejection of loan application. Lenders usually check your age, income, existing EMIs, credit history, and the current value of your property to decide on your loan eligibility. Moreover, for processing the loan application, you would be required to submit documents such as age proof, income proof, address proof, property documents, etc. To ensure a smooth loan application process, ensure to check the loan eligibility beforehand and keep all the necessary documents handy.

  1. Not evaluating your repayment capacity

You must not forget that a Loan Against Property is a secured loan wherein your property acts as collateral. Thus, if you fail to repay the loan amount within the stipulated time, the lender reserves the right to seize your property to recover the loan amount. To avoid this, it’s better to apply for a Loan Against Property only after evaluating your repayment capacity. Also, do not overborrow, as it can be financially burdensome at a later stage

  1. Not choosing the loan tenure wisely

It’s advisable to settle for a loan tenure that works the best for you. However, opt for a shorter tenure if you foresee an increased income in near future, or you can afford to pay back the loan sooner. A shorter tenure attracts a lower interest cost.

  1. Neglecting your credit score

Your credit score not only enhances the chances of loan approval but also makes you eligible for a competitive interest rate and favourable loan terms. A credit score of 750 or above is considered to be good enough by most lenders. Therefore, do not ignore the importance of a high credit score and work towards improving it before applying for a Loan Against Property. You can boost your credit score by clearing outstanding dues, having the right credit mix, and decreasing your credit utilization ratio.

  1. Not checking the prepayment and foreclosure charges

The prepayment facility would allow you to close the loan sooner and save on the interest pay-out. However, lenders usually levy a foreclosure charge in case you prepay your loan. Ensure to read the prepayment clauses and charges set by the lender before applying for a Loan Against Property.

At Kotak Mahindra Bank, you can easily avail a Loan Against Property up to Rs 5 crores, and with minimal prepayment charges. The application process is online and hassle-free. Apply for a Loan Against Property and take care of your monetary needs with ease, today.

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Tips on Choosing the Best Loan Provider

If you are faced with a shortage of funds or an emergency financial situation that you need to resolve faster, an online loan with no credit check can help you. With the right loan, you can finance home improvements, pay for your vacation or college fees and foot a wide range of other bills.

However, before you start applying for the loans, you need to understand your options and take time to choose the right lender. Sometimes, you might feel a bit spoilt for choices which can easily make you assume that the loan lender you choose doesn’t matter.

You need to keep in mind that not all lenders are equal and only responsible lenders have your best interest at heart. Therefore, it is critical to take time and choose the right loan provider. Here are some tips to consider when selecting the best loan provider.

1.     Consider Interest Rates, Fees and Other Charges

The first thing you need to pay close attention to while choosing a loan provider is the interest rate, service fee, and any other administrative charges that may apply.  One of the biggest mistakes people commit is simply looking at the interest rate and assuming that they will pay back less money.

Most of them don’t know that some lenders display relatively low-interest rates but charge a ton of additional charges that will eventually make the loan too expensive.

Therefore, before choosing an online loan with no credit check lender, find out what additional charges you will be expected to pay on top of your loan amount.

2.     Assess the Penalties and Repayment Costs

Sometimes, you may be in an excellent financial position, and you will want to make faster repayments so you can finish repaying the loan quicker than the stated loan tenure.  This has always proved to be a prudent move because it can save you a lot of money on interest cost.

However, some lenders don’t like it when you repay the loan early and will have early repayment penalties in place. You must be aware of such lenders and avoid them altogether.

Before you submit your loan request, carefully read the loan terms and ask anything you don’t understand. Enquire about all the potential penalties and repayment costs to avoid paying hefty penalties in the future.

3.     Check the Loan Amount

Depending on your financial needs, you may or may not know how much you need to borrow. Therefore, it is always good to choose a lender who is willing to offer you a substantial loan amount that you are sure will help you cover your expenses.

You should also pick a lender who offers more flexibility. Some lenders provide you with the option of withdrawing the loan amount in parts depending on your needs. In such a case, you only pay interest on the amount of money you use.

The bottom line is to ensure that the loan is flexible and offers you an option to borrow sufficient money to cater to your needs.

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Earn an incredible Earnings Like a Private Money Lender

Hard money lending industry is an excellent chance to earn earnings like a private money lender. As a direct consequence from the economic decline, property investors really prefer hard money lenders over traditional lenders. Most property investors are often buying distressed bank owned qualities with regards to flipping or rehabbing.

Regrettably, recent lending policies enacted by banks make it virtually impossible for anybody without pristine credit and big asset reserves to acquire financing to buy qualities to rehab. Actually despite pristine credit and good cash reserves the straightforward proven fact that the topic property must be rehabbed or has any functional deficiencies can get rid of the deal because the property cannot be eligible for a conventional financing.

Many occasions the previous owner might have were built with a property foreclosure party on its way out and destroyed or required all things in sight just before eviction. This is actually the most typical reason investors need use of private money.

Purchasing property like a private money lender may be the ultimate win-win situation for you personally, the investor and also the community as whole. By supplying property investors with quick no-hassle financing you’ll be able to charge a greater rate of interest, usually within the 15% range and produce an additional 3% to fivePercent by charging points around the loan.

As these loans are short-term and frequently compensated back within 6 to 9 several weeks the fast return of capital will help you to lend the cash over and over. Therefore creating yields more than 25% annually.

Within this business explore have only control of neglect the dollars but you will find the capacity to structure deals that leverage the experience and time of the customer.

The standard property investor needs to perform a large amount of hard work finding and vetting the deals, but because a private money investor you’ve other investors heading out locating the qualities and getting the deals. In addition it’ll just take a almost no time before the consumer base knows neglect the style good enough to simply provide you with the deals they are fully aware you’ll want to consider.

Even just in economic downturns the company can there be. Because of all of the foreclosures and short sales there are other than enough qualities readily available for pennies around the dollar.

Banks want to get these REO’s business books and smart investors wish to switch them. Like a private money lender you’ll be capable of get these investors the cash they require rapidly and set a 15% to twentyPercent profit in your wallet and their own every time.

In need of quick cash? The option of a payday loan can be handy, provided you look for a reliable and licensed money lender. If you require more money, you can consider a personal loan, which offers a much bigger amount.

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Befuddled About Loans? Get Best Online Quotes on Loans

Have your eyes set on that level you looked at a week ago? Need that dazzling red vehicle to be yours? Got a wedding coming up in the family? Need something different which is as of now too far in the red? Fortunately, nowadays, when the need or the need get greater than your methods, it is as yet conceivable to feel free to satisfy your fantasies. Make proper acquaintance with the huge, brilliant universe of advances, a protected and simple approach to make monetary courses of action for the present necessities, and pay the cash in portions later.

Credits are of numerous sorts. What’s more, anyway simple and bother free an advance may appear on the face, they quite often accompany a catch. Now and then, a credit expects you to keep a benefit (for the most part a property) as insurance to the advance sum, that is, on the off chance that you can’t pay the advance sum by the stipulated time, the bank or the monetary establishment maintains whatever authority is needed to remove the guarantee resource so as to separate its compensation back.

It is likewise a typical practice to contract a similar property for which the cash is being advanced, by giving the credit supplier a contingent responsibility for property, to be material if the borrower bombs in his installments. These advances are called Secured advances. Home credits by and large have a place with this classification of advances. Verified advances can be financed, or non sponsored. In the primary case, the credit does nor addition enthusiasm before the borrower starts paying it, and in the subsequent case, the advance beginnings picking up enthusiasm from the absolute first day of its issue.

Not all credits, notwithstanding, expect you to contract a property or a benefit. They by and large accompany their very own pack of conditions, and a high pace of intrigue is quite often one of them, however they are additionally advantageous and a lot simpler to get relegated. These are called unbound credits. Individual credits have a place with this class of advances.

There is additionally a third sort of advance, which is explicitly a momentary advance, and is called Demand credits. They don’t have a fixed date of installment and have drifting paces of intrigue which shift as indicated by the prime rate. The bank or the money related organization that has given the advance maintains whatever authority is needed to consider the borrower for installment any day inside the fixed stipulated time of close to 180 days. Contingent on the measure of credit and the advance supplier, these can be verified or unbound.

It’s anything but difficult to get an advance nowadays, and it’s simpler to stall out in one, manner more profound than you can deal with. Ensure before you restricted down on a credit you need to go for, you complete your examination about the ground certainties of that specific advance. Looking for assistance from online statements site would be exceptionally helpful in giving you a reasonable thought of the accessible credit alternatives for you in the market. Look cautiously before you jump, and be protected in your universe of dreams!

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