IDFC First Bank - Types of loans

Types of Deposits you can get at IDFC First Bank

• Fixed deposit
• Recurring deposit
• Add funds to your account
• Tax saver deposit
  

Their benefits:

• Competitive interest rates
• Flexibility
• No penalties for senior citizens on early withdrawal
  

Types of loans

Personal loan

• Loan amount ranging from 1 Lakh to 40 Lakhs
• Paperless digital sanctions
• Loan tenure from 12 months to 84 months*
• Flexibility to make up to 40%* part payment
• ROI starting as low as 10.75%*
  

Consumer Durable Loan

• Flexible EMI
• Competitive interest rates
  

Home Loan

• Simple and hassle free loan processing with minimum turnaround time
• Loans up to 90% of cost of property based on eligibility
• Pre-approved loans available as per requirement with no hidden charges
• Term Loan secured against residential properties
  

Loan against property

• Flexible EMI
• Competitive interest rates
  

Pre-owned car loan

• Flexible EMI
• Competitive interest rates
  

Two-wheeler loan

• Flexible EMI
• Competitive interest rates
  

Commercial vehicle loan

• Flexible EMI
• Competitive interest rates
  

Equipment hypothecation loans

• Flexible EMI
• Competitive interest rates
  

Micro-enterprise loan

• Flexible EMI
• Competitive interest rates
  

Business loan

• Loan amount from Rs 3 Lakhs to Rs 75 Lakhs
• Loan Tenures from 1 to 5 years
• Facility to top-up existing loans
  

Loan for women

• Flexible EMI
• Competitive interest rates
  

Investments

Here are the investment options which you can get at IDFC First Bank:

• Mutual funds
• Gold bonds
• Investment linked insurance
• IDFC FIRST ZERODHA 3-in-1
  

Insurance

Here are the insurance options which you can get at IDFC First Bank:

• Travel insurance
• Home insurance
• Term insurance
• Health insurance
• Motor insurance
• Investment Linked Insurance
• Pradhan Mantri Insurance
  

FOREX Services

• Transfer Funds abroad from branch
• Transfer Funds abroad with Net Banking branch
• Transfer Funds to India

Types of Mortgage Loans - 6 Types of Mortgages in India

In India, you get as many as 6 types of mortgages. Under the Section 58a of Transfer of Property Act of 1882, definition of a mortgage stands as an immovable property transfer of ownership to secure the payment of funds against it, creating a mortgage loan line of credit.

Without further ado, here are the various types of mortgages you can get in India.
6 types of mortgages in India

Simple mortgage

In this mortgage type, you keep an immovable property as a house as security in order to get a loan. The bank or lender retains all rights to sell off the property if you can’t repay.

Usufructuary mortgage

In this type of mortgage loan, the lender is transferred the immovable property without creating a personal liability on you, the borrower.

English mortgage

In this type, the borrower has to shoulder a personal liability. The mortgaged property is transferred on the condition that you can recover the property after successful repayment.

Mortgage by conditional sale

In this type, the borrower sells off the property with the legal terms that the sale becomes effective if he or she cannot repay the loan. However, if the repayment is successful, the sale becomes void.

Mortgage by title deed deposit

In this type, you deposit the property’s title deed as security and mortgage against the loan.

Anomalous mortgage

Any mortgage that does not come within the divisions above fall under Anomalous mortgage.

Mortgage loans generally include all of the following:

• Home loan
• Loan against residential property
• Loan against commercial property
• Land purchase loan
• Lease rental discounting
• Loan to buy another commercial property
  

The Six Best Types of Loans you can Opt for during Hard Times

During the pandemic and the global lockdown it has resulted in, problems are cropping up like manholes in a badly-damaged road. People are grappling with salary cuts, layoffs and job loss. Unemployment and loss of savings is a big concern for most people right now. With salaries getting halved and with jobs lost, expenses are rising to staggering proportions. During such times, people naturally see loans as a good way out. However, there’s a big problem that way as well in these tough times.

Banks and other lenders do not wish to give out new loans right now. It is too risky for them. Thus, they are acting conservatively right now, and targeting only a limited segment of the population as their preferred customer segment. However, if you are in need of an emergency fund, help is at hand.

Loan against property

These loans are sanctioned against collaterals of residential, commercial and interest property. The interest rates of LAP starts from 8.95% on an average. But it does depend on the lender, the amount of loan, the lender’s credit profile and other things. The maximum tenure is 20 years. Amount of loan depends on property valuation and the borrower’s repayment capacity.

Gold Loan

Bank’s may not want to give traditional loans like personal loans right now, but they are very eager to give gold loans. Why? That’s because gold loans are secured loans. You can get gold loans within a few hours after you apply. The amount you get as a loan can be 75% of the gold value and the interest rate starts from 9%.

Digital top-up home loans

If you have existing home loans, you can choose digital top-up loans. These do not have any end use restriction. Another good thing is that interest rates are quite lower than other loan alternatives which you can get as an existing home loan customer. These are, additionally, available for a longer tenure depending on the tenure of residual loan of the borrower.

Loan against credit card

If you do have a credit card already, you can get pre-approved loans depending on the card type, repayments and spending pattern. When you take the loan, the credit limit will go down.

Covid-19 personal loans

Some banks are offering personal loans specifically for the Covid-19 situation. However, these are only for their existing customers only, those who have their salary accounts with it or have home loans or personal loans. They also need to have a strong repayment history. These loans have lower interest rates and do not have any processing fees either. While most loans have 3 year tenures, some banks do give 5 year tenures. Additionally, banks give a moratorium till 3 to 6 months, though customers need to pay the interest during the moratorium.

Pre-approved personal loans

Most, if not all, banks offer pre-approved personal loans to a few customers only, especially those who have been their customers for a long time. For such customers, loans are given fast, and there are no collateral requirements either.

What is an SME Loan? - FAQs on SME loans

What is an SME Loan?

SME loans are special loans for Small Medium Enterprises. These are business loans that are extended to enterprises of a certain size only. As you can see, these are not given to large organizations. Moreover, the benefit of an SME loan is these are highly customized to suit the needs and requirements of the lender’s clients. The main purpose of SME loans is to meet the needs and requirements of small and medium sized companies.

Small-sized businesses have the perpetual difficulty of getting funds. Medium sized enterprises are faced by this problem too. For them, SME loans are very useful.

What do you mean by SME?

SME is a term to denote Small and Medium Enterprises. The term is useful for segmenting companies and organizations of different sizes. It is to segment businesses, companies and organizations based on their size. According to the European Union, an SME is one that is legally independent as a company and has less that or just 500 employees. Of course, only a medium sized company will have anything close to 500 employees, but fortunately, it also benefits from SME loans.

A small company is one that has investments of more than Rs. 10 lakhs but less than Rs. 2 crores. A medium company is one where the investment is more than Rs. 5 crores but is less than Rs. 10 crores.

Why are SME loans important?

SME loans are very important for the economy, especially right now. These play a significant role in creation of new job roles in any economy. By helping to create capital for companies, it indirectly aids in job creation. Studies have in fact shown than a considerable portion of job creation around the world is due to SME loans. Likewise, these loans contribute to a country’s GDP and ensure money flow across the economy.

One of the features of these loans is that these charge lower interest rates to clients than large banks. This enables clients to benefit from cheaper loan deals.

What are the benefits of SME loans?

There are several benefits in getting these loans, such as:

1) Identification and investing in specific and unique niches

2) It is able to react faster to market and economy changes due to smaller size of companies

3) SMEs help in building better relationship with employees and customers

4) It helps the economy by creating jobs, lowering poverty and raising the GDP of a country

What is a Credit Builder Loan ? - Credit Builder Loans

Credit lines in our lives are very important. In many cases, it is essential. Credit is needed for almost anything: from buying a dream home, going on that foreign vacation you have always wanted, to give a much-desired family tour to your loved ones, to enjoy your life, to meet medical and monetary emergencies. The list goes on. There is no end to the benefits which a loan can give you. Anything expensive nowadays requires getting a loan.

Why is credit score important?

Just like credit is important, credit score is much more so. Credit score is a numerical representation of your previous credit behavior. It refers to how you had handled your previous loans. Did you pay on time, or were you always late?

Your credit score is given by the credit bureaus. A credit score is in the range of 300 to 900. The closer you are to 900, the better loans and credit lines you can get. A high credit score tells of your high credit worthiness, which in turn refers to lower risk for loan providers.

While you may understand how important credit score is now, perhaps some of you have a bad credit score. A bad credit score is below a certain level, due to which you may not get good loans or any loan for that matter.

If you want to buy a good product with a loan or credit, you may get disappointed and frustrated to know that lenders will not give you this.

However, there is good news. Credit score is not constant, and therefore can change for the better too! Your credit score is a number that changes according to your credit actions.

How to increase your credit score?

If some of your credit actions have resulted in the score sliding down, it can also rise up with the right credit actions. All you need is responsible and right behavior. Soon you will see your score going up again. Here are some of the most common things you can do to improve your credit score again.

•  Be regular with your existing loan and credit products
•  Repay outstanding loan balances
•  Focus on keeping credit utilization ratio low
•  Get a fair mix or secured and unsecured loans
•  Do not suddenly close off your old credit accounts
•  Limit credit applications
  

As you can see, most of the options given above work for those who are pre-approved for credit products already. However, what about those who still find it hard to get any credit or new loans approved due to existing low credit scores? How can they get their scores up?

In this article, there are answers for that as well. Mymoneykarma is here to guide you to achieving the perfect credit score. Here is one good option for those with low credit scores, and who wish to build up the score: credit builder loan.
What is a credit builder loan?

A credit builder loan is one which is especially designed to cater to the needs of those seeking to improve their low credit scores, and for those who are new to credit.

How do Credit Builder Loans work?

Someone who has no or low credit score finds it hard to get any kind of loan. When they ask for loans, lenders tell them to get a good credit score first. However, the only way to get a higher score is by getting loans in the first place. So this vicious cycle just goes on and on. Fortunately, we have credit builder loans.

While there are other options like fixed deposits and secured credit cards, credit builder loans are the best, since in case of the other options a person may not have any securities to deposit for getting loans. In such situations, a credit builder loan is very useful. Even a Gold Loan can be used as credit builder loans.

The main idea behind this financial instrument is to lend out small amounts that people can pay back easily in a short time, and therefore increase creditworthiness.

Credit builder loans are designed by and are available at many banks and other financial institutions. Here is how to get these.

• Approach a credit lender who offers these
• Since you do not have an existing credit profile, or a bad one, the lender will see other points like social media profile and bank transactions to build up your credit profile, to help them making a decision to lend
• At times, banks may insist on lending just to those who have a account with them to reduce their own risk
• These loans are similar to personal loans, but the amount can be available since the loan is very small
• The tenure is shorter than normal personal loans, and ranges from 6 months to 1 year
• Once the bank disburses the loan, you have to start making regular EMIs
• When you pay regular EMIs, credit bureaus notice that and make improvements on your credit score

Ways To Get A Loan Despite Having A Low Credit Score

Lenders give you money after determining your credit worthiness, which means how likely you are to give back their loan on time.

Think of it from a different perspective of the lender. He is actually taking a risk by lending money to anyone at interest. After all, the borrower may not give back the money due to various reasons. This is why lenders, whether they are banks or individual lenders, give money after scrutinizing your credit worthiness. Understand, giving personal loans is risky.

They do this by seeing your credit score. A low credit score can indicate that you are not very credit-worthy, while a high score indicates otherwise. If you have a high credit score, banks will line up to give you loans.

Now, you may have heard that you can’t get loans with a bad credit score. However, it is not completely true. Here are ways to get a loan despite having a low credit score.

• Prove that your income can support EMI payments: Lenders are mainly interested in getting their money back on time. So if you have a stable monthly income which can support the monthly EMIs, they may not mind you having a low credit score. Yes, maybe you’ll get it at a high interest rate, but at least you’ll get the money.
• As for a lower amount: A lower amount mitigates the risk of the lender, even if slightly. So if banks are not ready to give you a large amount, ask for a small amount. They shall be more than likely to give you that. Giving a smaller amount makes banks more comfortable in dealing with you since smaller amounts are easier to repay.
• Apply along with a co-applicant or guarantor: So here’s the thing with co-applicants and guarantors. Their creditworthiness is more than yours, and if they co-apply or guarantee loan repayment, banks will be more willing to give the money. Since guarantors and co-applicants greatly increase the chances of repayment, you are more likely to get the loan.
• Correct mistakes in credit report: Your credit report can contain errors, and it is your responsibility to see that there are no errors. Understand, credit bureaus handle hundreds and thousands of credit reports a year, and this there can be errors easily. It is up to you to check. If you do find mistakes, report it to the credit bureau and they’ll take care of it.
• Ask the lender to consider your application with NA or NH in the credit report: This means that there has been an absence of credit in the last 3 years. If so, you may not have a credit score at all. In such cases, talk to your lender about this credit inactivity, and if you can get a loan. The interest rate shall be slightly higher.

These are measures which can help give you a personal loan despite having a poor credit score. It is important to have funds enough to repay them, otherwise your score shall go even further down.

Tips To Know Before Getting Loans In 2021

It may not be easy anymore to get a loan. Lenders are becoming stricter, especially due to the current economic conditions. And yet, people’s difficulties and therefore their desire for loans are increasing.

One may need a loan for just about anything. It can be for children’s education, debt consolidation, marriage, car purchase, property purchase, equipment purchase, and more. It can be anything, and yet the fact remains that there is a great demand for loan right now. You may need money urgently, but lenders may not want to give you anything, for any reason.

To increase your chances of getting loans, here are a few tips:

• Check the loan eligibility before applying: Here’s a big mistake many people make. They don’t see the lender’s eligibility criteria and apply for the loan. Some understand that they are not eligible, but apply anyway just to get a chance, which never comes by the way. It is simple. If you do not meet the criteria, you don’t get the money. Worse, it can harm your credit score too due to a loan enquiry and denial.
• Check your credit score before applying: Lenders want your credit score beyond a certain level, without which your loan application stands to be denied. Your credit score is a measure of your credit worthiness and how trustworthy you are in repaying credit. Your credit is important as it is based on previous loans, income, assets, repayment behaviors, and more. The score needs to be at least 700 to be considered.
• Don’t apply for too many loans at once: This is another big mistake people make in their desperation to get emergency money. They apply at too many places at the same time. This, however, lowers your credit score, and banks can even deny you loans if they come to know you are asking at multiple places.
  
  Multiple applications mean multiple rejections, since it signifies lack of ability to repay the loan and lack of confidence. The best thing to do is to research about a few lenders and pick the one who suits you most.
• Correct errors in your credit report: You can see your credit report free once a year, and the cost afterwards is negligible. Studying the report will let you come across any mistakes. Mistakes and misstatements affect your credit score, and therefore many things in your life. Therefore, take your time to study the report. If you find mistakes, inform the concerned credit bureau. It’ll correct your report.

In case of rejection, don’t apply before 6 months: This is a common mistake as well. Right after a loan application rejection, people apply for another. The problem? It lowers your credit score, which in turn makes it harder for you to get credit later on.

Emergency Fund - 3 Ways To Sustain Your Family If Your Emergency Fund Runs Out

Yes, times are bad. The economy is not good. Jobs are drying up, as are people’s savings. There is news of job loss and salary cuts everywhere. Yes, times are bad.

Now, you may have an emergency fund, but what will you do or can do when this fund dries up as well? Be prepared for anything, or at least think these things through. Then financial shocks won’t be much of a problem. Let’s face it, people are getting desperate right now with their savings drying up, which is why loans are a big deal right now.

But if you plan ahead for such financial setbacks, you’ll be a lot better off than most. Here is what you can do if you see your emergency fund drying off.
Find out what resources you have

If you have a home, you can get a home equity credit line, which is one of the cheapest credit lines you can get right now. You can use your home to get a credit if the situation comes to the worst. However, use this option only when there is no other avenue left. Use it if there’s no food on the table and there’s no other way out. In that case, mortgage your home and do your best to find a good job in the meantime to start paying it back, or saving up for repayment.

Think about using your credit cards as well in such dire situations, before mortgage the home. Yes, interest rates for credit card loans are higher, but in tough situations, anything helps. Payday loans are not recommended as their interest rates are too high, often in 3-digits!
Cut down on bills

Before you even tap into your emergency funds, why not cut down on things you don’t need right now? Can you do it with just one mobile phone? Sell the spare. Don’t need some old clothes? How about a garage sale! Can you do without a cable TV connection? Great, do so. Anything you save right now is going to help you out. Use these first, for a bare-bones lifestyle before even getting to the emergency fund.

Your priority is keeping your home and basic utilities like power and water. If you rent a property, paying that rent is your priority because landlords can, in some areas, legally toss you out for even one month’s non-payment of rent.

If you have loans, try to negotiate the lower payments. If that’s not possible, bear with your creditors and don’t miss payments. That can harm your credit score, and spoil your future chances of getting loans.
Keep retirement funds as your last resort

This is another one of your last line of defenses. This can save you for the time being, but in time it can create a problem during tax time as you’ll have to pay income tax and a hefty penalty. Additionally, if you take money from this fund, you lose all the compound interest till now. If you do have a job, withdraw half of your retirement savings or Provident Fund.

Secured and Unsecured Loans - How Do Unsecured Loans Work?

Before you decide to choose one, you should know which would be the most suitable one for your needs. Read on to know more about these two types of loans and understand how they work.
Secured Loans

When you provide the lender with collateral (a personal asset that has equal or greater monetary value than the borrowed amount) against the money that you borrow, it qualifies as a secured loan. It is called 'secured' because the collateral serves as a security for the lenders. In case you fail to repay the loan, the lender can confiscate the asset and sell it off to make up for the loss. Home loans, Auto loans and Secured credit cards are a few examples of this kind of loans.

How Does It Work?

When you take a secured loan, you promise a valuable asset to the lender in case you fail to repay. You get to keep this asset as well as build your credit as long as you are making timely payments. If you fail to pay, the lender can take away the asset. When you successfully pay off the entire loan, the asset becomes yours completely.

Secured loans are considered to be of lower risk as the collateral ensures that the lenders are not at high risk of loss. Hence, it is easier to qualify for a secured loan even if you do not have a high credit score. When you take a secured loan, you might be able to borrow larger amounts at lower interest rates and better terms.

What Happens if You Default?

Well, if you take a secured loan, you agree to hand over the collateral to the lender in case you fail to pay. Therefore, the lender has the legal right to take possession of the asset. If you fail to pay your auto loan, the car will be repossessed by the lender. If you default on your home loan, the lender will foreclose your home. If you are unable to pay your secured credit card bills, the lender can forfeit the security deposit.

All these instances will have a negative impact on your credit score, and leave a derogatory remark on your credit report. A serious delinquency like a repossession or a foreclosure can remain on your credit report for seven years.
Unsecured Loans

An unsecured loan doesn't have any collateral attached to it for security. The lender judges you by your creditworthiness before lending an amount to you. It is comparatively difficult to qualify for an unsecured loan and it is mandatory that you have a good credit history. Credit cards and personal loans are examples of unsecured loans .

How Do Unsecured Loans Work?

Unsecured loans do not include any collateral. Hence the lenders have nothing to claim if you default; they take a huge risk when they lend the money. However, the lenders and the borrowers must agree to certain terms for repayment. These terms generally include the time by which the money has to be returned and the interest rates that are applicable.

You cannot get an unsecured loan approved until you have a good credit score and prove that you are creditworthy. Usually, unsecured loans have a higher interest rate and stringent terms.

What Happens If You Default?

If you fail to repay an unsecured loan, your credit score takes a blow. There might not be collaterals against unsecured loans, but that doesn't let a borrower escape easily. Usually, late payments are the most important factors that affect your credit scores. Lenders can impose an exorbitant rate of interest on defaulters. The burden of defaulting on such a loan might drive you into debt.

A delinquent account could be written off to a third party agency as a collections account. If you are a severe defaulter, lenders could take legal actions against you and you could land in a terrible lawsuit. All of these will add a derogatory remark on your credit report; future lenders will find these remarks on your credit report, interpret them as red flags and refuse to give you credit.
Secured and Unsecured Loans - Their Impact on Credit

Irrespective of the type of loan, if you default on a loan, your credit history will suffer. Your credit score will certainly reduce, but a few other factors in your credit history will determine the rate of this reduction.

When you default on an unsecured loan, you get a few chances to make amends. Your credit score reduces by 50 to 100 points, depending upon the time of delay; you get more than 120 days to make the payment before your account is written off as a delinquent account.

However, if you default on a secured loan, the lender immediately seizes the collateral and reports it to the bureaus; such a derogatory remark can single-handedly reduce around 100 to 150 points.

All You Need to Know About Credit Limit - Credit Limit and Available Credit

 What is credit limit and how does it work?

A credit limit is the maximum amount of credit that a borrower can get. It can take the form of a home equity line of credit, a credit card, or other revolving credit accounts. Credit Limit is therefore the maximum amount you can borrow. Lenders set their own credit limit, and sometimes for each customer group. At times, this can even be on a case-to-case and individual basis. For instance, right now some banks are decreasing the credit limit of those working in industries affected by the pandemic, such as the hospitality sector. The level of credit limit normally depends on one credit score, income, payment history, and a range of other factors.

Loans with collateral will utilize the income of the borrower and the property’s value, or the remaining home equity for setting the credit limit. In this article, we shall talk of credit card account vs. other loan types.
Credit Limit and Available Credit

Credit card debt is actually revolving credit, which means that the amount revolves around depending on your monthly payments and fund use. It means you have a limit or ceiling as to how much of the given funds you can use. For instance, if you have a credit card loan of $5000, it is also the maximum amount. Available Credit is the amount of credit left available after spending. For instance, if you spend Rs.3000, the Available Credit is Rs.2000. If you pay back Rs.2000, you’ll have Rs.4000 credit available.
What happens when your credit limit changes?

A lender can increase your credit limit. This can happen if you have been a good customer with a good payment history. It can also happen if you have not maxed out your credit limit. As you can understand, these are ultimately good for your credit score. However, it can be tricky as well. Having a higher credit limit means that you may be induced to borrow more. However, there won’t be problems as long as you continue to pay on time.

There are some cases where your credit limit will reach so high that you will look less attractive as a prospect to lenders. Why? If you have a combined credit limit that is much higher than what you can afford to pay back, lenders will not be likely to give you any more loans. If you have more credit available than what you earn in one year, you may want to ask lenders to lower the credit limit instead. This gives you more access to loans and credit card loans.

There are times where lenders lower your credit limit without you asking. This happens when you are late with payments, default frequently, and struggle to pay, and give off signs that you are not likely to pay back the loan. It certainly happens when you stop paying back the loan. This is bad for your credit score, and places you in greater risk of defaulting on your existing credit limit.
Going beyond your Credit Limit

Earlier, credit card issuers let people overspend and go beyond their credit limits. For the customer, it was beneficial because their transactions are not rejected at retail stores. However, creditors then started charging fees for customers going over their credit limits. This fee was normally $35. Small as it may seem, this amount kept getting added to one’s credit balance, and pulled a lot of people down in debt. Additionally, overspending also initiates an increased interest rate on debt. If you had any credit card rewards, those were soon lost.

As you can understand, lots of people were trapped in a cycle of debt and fees. When new laws were passed to limit this practice by banks, the problems of customers only increased.

Of course, the best course of action to take in this case is to not to go over your credit limit.
How to increase your credit limit

You can increase your credit limit overall, but that’ll bring some drawbacks as well. Doing so increases the chances of risk exposure and your credit score may get affected as well. However, a new credit account has lower interest rates to start with, and you can get a better deal if you choose Balance Transfer.

A simpler way to increase your credit limit is by asking your creditor. They’ll agree if your credit score is high, if your payment history is good and if your income is sufficient. However, there’s a downside here as well. It brings a hard inquiry on your credit report. What you can do is to look over your credit report on your own beforehand. If there is something negative, do not apply for a credit limit increase or a new credit line. Solve the problem first, and then apply.

How to get a Personal Loan when you have a Bad Credit?

 Let’s get one thing straight. Bad credit score and loans do not go hand in hand. That’s like the proverbial fork in the road, or even a dead end if you will.

Lenders take a risk when they give away loans. What if their borrowers default? Then they may never get back their money, unless of course there’s a security. In case of personal loans, since they are unsecured loans, the risk is greater. That’s why more emphasis is given on your credit score. It needs to be of a sufficient level before anyone will give you loans, especially personal loans.

However, it is not impossible to get personal loans in case your credit score is low. There are still some things you can do to prove that.

• Prove that your income is enough to support EMI payment: This is one of the most important steps you can take. A lender may just accept to give you a loan if you have a steady job with a salary to guarantee you’ll pay back the loan. However, you may still have to pay a higher interest.
   

• Consider a lower personal loan amount: Can you do with a small loan amount? If you can, consider that seriously because without most lenders may not consider your case if you have a low credit score. However, they can if you need only a small loan that is of less risk to them.
   

• Take the help of a guarantor or a co-applicant: Doing this makes the likelihood of getting the loan higher. That’s because in case you can’t give back the loan, your guarantor will have to.
   

• Tidy up your credit report: Your credit score is low because it's in a mess. Consider taking time off to clean it. If none of the above steps work for you, this one will even though it’ll take much more time.

5 Tips To Know Before Getting Loans In 2020

 

One may need a loan for just about anything. It can be for children’s education, debt consolidation, marriage, car purchase, property purchase, equipment purchase, and more. It can be anything, and yet the fact remains that there is a great demand for loan right now. You may need money urgently, but lenders may not want to give you anything, for any reason.

To increase your chances of getting loans, here are a few tips:

Check the loan eligibility before applying: Here’s a big mistake many people make. They don’t see the lender’s eligibility criteria and apply for the loan. Some understand that they are not eligible, but apply anyway just to get a chance, which never comes by the way. It is simple. If you do not meet the criteria, you don’t get the money. Worse, it can harm your credit score too due to a loan enquiry and denial.

Check your credit score before applying: Lenders want your credit score beyond a certain level, without which your loan application stands to be denied. Your credit score is a measure of your credit worthiness and how trustworthy you are in repaying credit. Your credit is important as it is based on previous loans, income, assets, repayment behaviors, and more. The score needs to be at least 700 to be considered.

Don’t apply for too many loans at once: This is another big mistake people make in their desperation to get emergency money. They apply at too many places at the same time. This, however, lowers your credit score, and banks can even deny you loans if they come to know you are asking at multiple places.

Multiple applications mean multiple rejections, since it signifies lack of ability to repay the loan and lack of confidence. The best thing to do is to research about a few lenders and pick the one who suits you most.

Correct errors in your credit report: You can see your credit report free once a year, and the cost afterwards is negligible. Studying the report will let you come across any mistakes. Mistakes and misstatements affect your credit score, and therefore many things in your life. Therefore, take your time to study the report. If you find mistakes, inform the concerned credit bureau. It’ll correct your report.

In case of rejection, don’t apply before 6 months: This is a common mistake as well. Right after a loan application rejection, people apply for another. The problem? It lowers your credit score, which in turn makes it harder for you to get credit later on.

Top 6 Best Types of Loans you can Opt for during Hard Times

 Banks and other lenders do not wish to give out new loans right now. It is too risky for them. Thus, they are acting conservatively right now, and targeting only a limited segment of the population as their preferred customer segment. However, if you are in need of an emergency fund, help is at hand.
Loan against property

These loans are sanctioned against collaterals of residential, commercial and interest property. The interest rates of LAP starts from 8.95% on an average. But it does depend on the lender, the amount of loan, the lender’s credit profile and other things. The maximum tenure is 20 years. Amount of loan depends on property valuation and the borrower’s repayment capacity.
Gold Loan

Bank’s may not want to give traditional loans like personal loans right now, but they are very eager to give gold loans. Why? That’s because gold loans are secured loans. You can get gold loans within a few hours after you apply. The amount you get as a loan can be 75% of the gold value and the interest rate starts from 9%.
Digital top-up home loans

If you have existing home loans, you can choose digital top-up loans. These do not have any end use restriction. Another good thing is that interest rates are quite lower than other loan alternatives which you can get as an existing home loan customer. These are, additionally, available for a longer tenure depending on the tenure of residual loan of the borrower.
Loan against credit card

If you do have a credit card already, you can get pre-approved loans depending on the card type, repayments and spending pattern. When you take the loan, the credit limit will go down.
Covid-19 personal loans

Some banks are offering personal loans specifically for the Covid-19 situation. However, these are only for their existing customers only, those who have their salary accounts with it or have home loans or personal loans. They also need to have a strong repayment history. These loans have lower interest rates and do not have any processing fees either. While most loans have 3 year tenures, some banks do give 5 year tenures. Additionally, banks give a moratorium till 3 to 6 months, though customers need to pay the interest during the moratorium.
Pre-approved personal loans

Most, if not all, banks offer pre-approved personal loans to a few customers only, especially those who have been their customers for a long time. For such customers, loans are given fast, and there are no collateral requirements either.