Loans become part of one's financial matters when one can’t meet their aspirations with their current income or due to unforeseen emergencies such as hospitalisation. Personal loans help to achieve smaller goals such as financing marriages, vacations and smaller expenses.On the other hand, high home prices makes home loan an essential while buying a property. Many borrowers us end up opting for both: personal as well as a home loan. As income increases over time or when one receives a one-time cash inflow, a borrower wonders which one should be prepaid first. The emotional answer to this question is to ‘secure’ one’s home by paying off the loan. But for a logical, financial answer, one needs to take into considerations several factors:Focus on the cost of loanTo turn debt free, one may choose to pay off the largest loan first or the smallest loan first, depending on one's view. In the financial world, the cost or interest rate … [Read more...] about Home loan or personal loan: Which one you should get rid of first?
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Issuance of a credit card marks the entry into the world of credit for most millennials. The journey that starts with a credit card generally peaks when one opts for a home loan, thanks to sky-high home prices. Obtaining a home loan at an attractive rate is a task for many. But they forget that if one uses a credit card prudently, it can help strike a better home loan deal. Here is how it works.Lenders prefer to offer home loans to individuals that have a credit score in excess of 750. This score is not built overnight. If a borrower has been repaying the loan on time, it can help build a credit score over a period of time. Here is how your credit card usage aids in building a credit score and obtain a home loan at an attractive rate of interest.Timely repayment of outstandingCredit cards allow you to access funds without interest for a stipulated period of time, if you pay the entire bill before the due date. “Failure to pay the bill in full attracts interest but also harms … [Read more...] about Here’s how to use your credit card to avail better terms on a home loan
Bank of Baroda, Union Bank of India and Syndicate Bank have started differentiating their retail loan offerings to customers based on their credit score slabs obtained from the Credit Information Bureau India (CIBIL), according to an Economic Times report.The first step of segregating retail loans into their own versions of prime and sub-prime risk exposure has been done to increase transparency, it added.Bank of Baroda will use three credit score slabs from CIBIL to offer three home loan versions, wherein customers with a credit score above 760(out of 900) would pay interest 8.1 percent interest on new loans.Close In comparison to those in the lowest 675-724 range would pay 9.1 percent and those in the middle range of 725-759 will pay 8.35 percent. related news Rajasthan govt has zero tolerance policy on corruption: Ashok Gehlot Five state finance ministers lash out at Centre over delay in GST compensation IndiGo, GoAir to replace 111 and 54 PW engines in 72 … [Read more...] about PSBs offering home loan options using customers’ CIBIL scores: Report
The home loan is the biggest liability one takes in his/her lifetime. Getting it right is a must as it helps you in achieving your dream of owning your house with minimal trouble. Borrowing money is a big task and the first exposure to credit for many comes through the use of credit cards. Here are three mistakes associated with credit card usage that you must avoid if you intend to apply for a home loan.Defaulting on your credit card billThis could be the worst possible thing that can happen to you. If you default paying the credit card bill, it will show that you do not have money to even service your short-term liabilities. When you are going to apply for a large loan such as home loan even a ‘I simply forgot to pay’ can cost you dear. The credit officer may simply choose to play safe and deny you home loan.Close “Do pay your entire bill outstanding before the due date,” says Sukanya Kumar, founder and CEO of RetailLending.com. Timely payment of your … [Read more...] about Three credit card mistakes you must avoid before applying for home loan
The mail hits your inbox announcing the interest rate hike on your home loan. That is a sad news, especially when festive season is around. Many a times, borrowers find it difficult to pay the increased amount of EMI (equated monthly instalment) and hence, look for reducing the rate of interest by transferring their loan to some other lender. If you, too, are contemplating switching your home loan to a new lender, here are a few factors you should consider.Rate differentialDo not get worked up with a rate hike on your home loan. Ascertain exact amount of rise in your home loan EMI. Also, do not jump to the first offer you get.Close “As a rule of thumb, if more than 75% of your loan repayment tenure is pending and the difference between existing rate of interest and the prospective rate of interest exceeds 75 basis points, then it makes sense to go for a balance transfer,” says Suresh Sadagopan, founder of Ladder 7 Financial Advisories. related news Use … [Read more...] about 5 points you should check before you think of home loan balance transfer