How Can i get a Personal Loan with a bad credit score ? - Credit Score for Personal Loan

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.

1. 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.
2. 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.
3. 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.
4. 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.
5. 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.
6. 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.

Health Insurance Policies - Top Health Insurance Policies for 2021

It can be tricky to find out which health insurance policy is best for you. After all, there are so many policies out there from so many companies. It can be confusing. You can get into what is known as ‘analysis paralysis’. What it means is that when there are so many choices, you analyze the choices so much that your decision gets paralyzed. Yes, that is what happens when there are too many health insurance policies to pick from. After all, this is a decision that shall affect your life for a considerable time.

Thus, you need to make an informed decision.

In this article, we shall look at some of the top Health Insurance Plans in India under various categories.

The following premiums are calculated having in mind the profile of a 35 year old person and an assured sum of Rs. 5 lakh.

• Iffco Tokio Individual Health Protector- Rs. 4747
• SBI Retail Health- Rs. 5419
• New India Assurance Mediclaim- Rs. 5420
• Liberty Health E-connect- Rs. 5724
• Aditya Birla ACtiv Assure Diamond- Rs. 6366
• Universal Sompo Complete Essential- Rs. 6393
• Tata AIG Medicare Protect- Rs. 6724
• Liberty Supreme- Rs. 7584
• Magma HDI Shield- Rs. 9047
• Star Health and Allied Gain- Rs. 17770
• Average premium of plans: Rs. 8295

For the cheapest health insurance plans for individuals, we have found these insurers to be the best providers. They give the best coverage at the lowest price across the country. Here’s a comparison of the four of them.

Top Life Insurance Policies for 2021

Unfortunately, no one is invincible. No matter how advanced science and civilization is now, there are still uncertainties like heath, disability and disease. These can happen at any moment. Because of this, one needs to get the best possible term life insurance in order to secure the financial future of his or her loved ones.

In our country, there are 24 insurance companies that offer term life insurance plans. Since there are so many products out there, it is easy to feel confused. To bring down your worries, here is a list of the top 6 term life insurance plans for 2020 and 2021.

These are effective enough to be useful during the hard times, and are sold by insurance companies having the best claim settlement record in the whole market.
Details of the life insurance plans
LIC Tech Term Insurance Plan

This offers all the needed protection to the family of the insured in case of the insured person’s death.

Features and benefits:

• Premiums you pay per year are deductible for taxes.
• NRIs shall be covered under this plan even if they are not in India but they need to be in the country for medical tests
• The company offers a free lock-in period. The policy holder can then return the policy within that duration if the person is not satisfied by the clauses.
• You can get the plan through an online application process without the need of intermediaries.

 
ICICI Prudential iProtect Smart Term Plan

This is a highly effective plan that offers a 360 degrees coverage at a very affordable premium.

Features and benefits

• The plan gives female policyholders an extensive coverage for breast and cervical cancer under the Accelerated Critical Illness Benefit.
• Policyholders have the option to choose accidental death benefit and the accelerated critical illness benefit.
• The surrender value is applicable to one single premium
• The policyholder is eligible to get tax benefits for premiums paid.

SBI Life Shield

It is a type of non-linked and non-participating insurance plans. It offers a high coverage in return of minimum premiums.

Features and benefits

• It offers 30 days to review the terms and conditions.
• Your paid premiums are tax exempted.

It has two options: Increasing Cover and Level Cover. Both of these covers have the accelerated terminal illness benefit. Should you want to go with increased power, your assured sum shall increase by 10% after each 5 years of policy tenure.

The plan comes with an option to increase the coverage through riders like SBI life-accidental death benefit rider & SBI life-Accidental total & permanent disability benefit rider.

HDFC Click 2 Protect 3D Plus Term Plan

This plan covers three uncertainties like disability, disease and death. It is mainly for women and children.

Features and benefits

• Policy holders who are women and are non-smokers can get the plan at a low premium.
• It gives maximum flexibility for premium payouts, terms and more.
• If you give premiums regularly, you can get tax benefits.
• This plan gives you as many as 9 options to choose from.

Max Life Smart Term Plan

This plan gives you comprehensive protection against as many as 40 critical illnesses, death, disability and gives financial protection for the family in case of the policyholder’s absence.

Features and benefits

• Coverage can be enhanced with riders like accidental cover and accelerated critical illness if you pay more premiums.
• It gives 7 variants of death benefits.
• There are various premium payment options.

Edelweiss Tokio Life – My Term+

It offers pure risk coverage. It covers you and your spouse and also gives the additional benefit of a limited premium payment plan.

Feature and benefits

• It offers a waiver of premium benefit under which you don’t need to pay the premiums if you are diagnosed by any one of the 12 listed critical illnesses
• It gives three death benefit payout options
• Premiums paid and received are tax free

So, there you have it! The top life insurance plans for 2020-2021.

Loan Rejection - Is Loan Rejection Hurting Your Credit Score?

It hurts when your loan application is rejected. However, it hurts your credit score more than it hurts you. Getting rejected for a loan is bad for the score, not just for the short term, but for the long term as well. Getting rejected once increases your chances of getting rejected by other lenders as well. Yes, these things do get recorded in your credit report, and thus damage the score.

If your credit score is low, it can be due to a wide variety of factors. It can be due to debt settlements, on-payment of debts, not paying debt installments on time, high credit utilization, and much more. Thus, there can be many reasons for a low credit score.

The good news is that there are just as some ways to improve or increase it. But you won’t go into those points in this article. Here we shall detail out the impact of a rejected loan application on your credit score.
What is the credit score?

Your credit score is a 3-digit number that measures your credit worthiness, or how likely you are to repay loans. If the score goes down due to whatever reason, other lenders will see you are a risky candidate to give loans to.
Impact of a loan rejection on your credit score

Lenders make a credit inquiry each time you apply for a loan. This is known as a hard inquiry, which alone lowers your score if just a little bit. This is why experts warn not to apply at too many places at once for credit, as it only increases the risk of multiple rejections.

Thus, be careful before applying for credit. If there is a rejection, ask the bank or lender why it was so. Ensure that you don’t make the mistake again while applying next time.
Reasons why your loan may have been rejected

There can be many reasons behind a loan rejection. To know the reason behind a loan rejection, and what is affecting the score, check your credit report. Here are the common reasons behind a low credit score.

• Taking multiple loans: Do you have more than one loan account? If so, banks are more likely to refuse you loans and even credit cards. This is because they see you as one with an unstable personal finance since you are always in need of loans.
• Loans defaulted: Too many of these, regardless of whether it was solely your account or whether it was a joint-loan account, you will be penalized by loan denial later on. Banks don’t want to give loans to one who has defaulted on loans.
• Credit score remarks: Loan defaults are not the only problem which can lower your credit score. Did you make a debt settlement with a bank? If so, then your credit report now contains the remark “settled.” This makes it hard to get loans later. However, you can still get credit if you give security. Lenders are more likely to reject unsecured loan applications at this point.
• Employment status: Incidents of late salary credits and when the employer is not well-known to the bank can give rise to loan rejections.

6 things to do to raise your credit score?

Here are a few things you can do to get back on track. It’ll take time, but you’ll get there.

• Pay off all debts
• Have a low credit utilization ratio, below 30%
• Pay overdue bills
• Do not take multiple loans
• Get a loan tenure which suits you
• Get mixed loans

Follow these tips, you'll get over a loan rejection.

3 Steps to Have a Debt-Free Year - Debt Free Year

New Year is a time for making resolutions, decisions and for reflecting on the things in your life. Every year, countless numbers of people in India resolve, at the year’s beginning, to pay off their debt. However, very few of them actually do that.

By February, the enthusiasm you had in January may most likely wear off. This will be faster if your plan was too complex or too flimsy. In these cases, without a concrete plan, your plan shall fizzle out and finally be forgotten.

Instead, try out this plan. Complete the first two steps and you get to choose a payoff method in step three, which shall carry you through for the rest of the year.

Know your debts: It might sound scary, but you do need to know your debts, or the money you owe to people or agencies. Besides, you do need an honest evaluation of your debt. Also, you only need to do this just once.

Fund your debt accounts: Now that you know what debts you have, it is time to become free of them. To do that, there are a few sub steps. First of all, you need to calculate your monthly expenses, including what you need to create your emergency fund. Now, subtract that amount from your monthly income. This shall give you the funds you can dedicate towards eliminating debt.

To make real progress, you need to do two things. Firstly, you need to earn a bit more, which you easily can by cutting off excess expenses, selling old electronics and even your cable connection. All this might not be fun to do, but remember that doing these shall help you a lot in settling your debts.

Find a repayment strategy and stick to it: There are so many ways to fall into the debt trap, but just two ways to climb out of it. These strategies are the Debt Avalanche and the Debt Snowball. These depend on your preferences for persistence and instant gratification.

Debt Avalanche strategy can be used if you want results fast, but it can feel slow in the beginning. In this strategy, you pay off those debts with the highest interest first. Over time, this strategy saves you thousands. The only problem is that it takes time to get the first debt to be settled.

Debt Snowball is the strategy in which you get rewards upfront. In this, you focus on the smaller debts first. Since these get over faster, you get more motivation to keep continuing. You focus on the smaller debts first, no matter what the interest rates are. The catch is that this process takes longer and costs more in interest.

You can supplement either strategy with the strategy called Debt Snowflakes. In this strategy, you put small savings for your goals.

80/10/10 Mortgage - Is an 80/20 Mortgage a Good Idea?

There are many ways to buy a home, and several more if you want to get a mortgage. Now, home loans and mortgages commonly come in the form of long-term plans, such as 30-year loans. These enable you to spread your EMIs over a huge period of time, thereby decreasing the risk of spending a huge amount in a short time. However, you still need to give the EMIs, and the longer your loan term is, the more you pay in total. There are other options apart from this.

Here’s another common option: You put 10% of the home’s cost as down-payment to book the property, while the rest 90% you pay with the aid of a loan. But here’s one thing to remember: if the down payment is less than 20%, you need to pay private mortgage insurance in addition to the interest and principal for the loan. As you can see, this also forces you to part with a larger EMI at the end of each month. Larger loan amounts and their additional mortgage insurance can make your dream of owning a dream home just that, a distant dream.

But there is another choice, and this one is not as bleak as the ones before it. This is called the 80/10/10 mortgage, or the piggyback mortgage loan. This type allows you to get a home that you want and even avoid private mortgage insurance. All that by giving just 10% down payment! However, there are some small drawbacks.

However, first we shall explain how this mortgage type works, and then state the pros and cons.

How does it work?

Firstly, you need to choose a lender who will work with you, and who shall underwrite the loan type. Here’s when you’ll give the 10% down payment in cash in return of the first mortgage plan for 80% of the property’s purchase price, and a second mortgage loan for just 10% of the purchase price. Here’s where it gets interesting. The second mortgage “piggybacks” above the original mortgage loan.

This is indeed similar to the 20% down payment plan as you do not need to pay PMIs. However, the 80/10/10 mortgage is still a form of debt and you need to make installments monthly on time, and ultimately repay it. Actually, you’ll be making two monthly mortgage payments per month.

Pros of a 80/10/10 mortgage

   It allows you to buy a home with fewer down payments.

   It enables you to avoid paying PMIs as monthly payments.

Cons of 80/10/10 mortgage

You need to repay two mortgages, which means paying two EMIs per month for the two mortgages, and that the rates can rise in the future. 80/10/10 mortgage interest rates are higher than primary mortgages. Origination fees, principal and interest all need to be paid.

These loans have adjustable interest rates, and that means these can go up. Added costs and higher interest rates can certainly pose more problems

Deciding on taking a 80/10/10 mortgage is not a light decision. You need to calculate the expenses over time, and how it compares to other mortgage options. Also know that this option is given to borrowers selectively.

Top Life Insurance Policies for 2021

 Unfortunately, no one is invincible. No matter how advanced science and civilization is now, there are still uncertainties like heath, disability and disease. These can happen at any moment. Because of this, one needs to get the best possible term life insurance in order to secure the financial future of his or her loved ones.

In our country, there are 24 insurance companies that offer term life insurance plans. Since there are so many products out there, it is easy to feel confused. To bring down your worries, here is a list of the top 6 term life insurance plans for 2020 and 2021.

These are effective enough to be useful during the hard times, and are sold by insurance companies having the best claim settlement record in the whole market.

Details of the life insurance plans
LIC Tech Term Insurance Plan

This offers all the needed protection to the family of the insured in case of the insured person’s death.

Features and benefits:

• Premiums you pay per year are deductible for taxes.
• NRIs shall be covered under this plan even if they are not in India but they need to be in the country for medical tests
• The company offers a free lock-in period. The policy holder can then return the policy within that duration if the person is not satisfied by the clauses.
• You can get the plan through an online application process without the need of intermediaries.

 
ICICI Prudential iProtect Smart Term Plan

This is a highly effective plan that offers a 360 degrees coverage at a very affordable premium.

Features and benefits

• The plan gives female policyholders an extensive coverage for breast and cervical cancer under the Accelerated Critical Illness Benefit.
• Policyholders have the option to choose accidental death benefit and the accelerated critical illness benefit.
• The surrender value is applicable to one single premium
• The policyholder is eligible to get tax benefits for premiums paid.

SBI Life Shield

It is a type of non-linked and non-participating insurance plans. It offers a high coverage in return of minimum premiums.

Features and benefits

• It offers 30 days to review the terms and conditions.
• Your paid premiums are tax exempted.
• It has two options: Increasing Cover and Level Cover. Both of these covers have the accelerated terminal illness benefit. Should you want to go with increased power, your assured sum shall increase by 10% after each 5 years of policy tenure.
• The plan comes with an option to increase the coverage through riders like SBI life-accidental death benefit rider & SBI life-Accidental total & permanent disability benefit rider.

HDFC Click 2 Protect 3D Plus Term Plan

This plan covers three uncertainties like disability, disease and death. It is mainly for women and children.

Features and benefits

• Policy holders who are women and are non-smokers can get the plan at a low premium.
• It gives maximum flexibility for premium payouts, terms and more.
• If you give premiums regularly, you can get tax benefits.
• This plan gives you as many as 9 options to choose from.

Max Life Smart Term Plan

This plan gives you comprehensive protection against as many as 40 critical illnesses, death, disability and gives financial protection for the family in case of the policyholder’s absence.

Features and benefits

• Coverage can be enhanced with riders like accidental cover and accelerated critical illness if you pay more premiums.
• It gives 7 variants of death benefits.
• There are various premium payment options.

Edelweiss Tokio Life – My Term+

It offers pure risk coverage. It covers you and your spouse and also gives the additional benefit of a limited premium payment plan.

Feature and benefit

• It offers a waiver of premium benefit under which you don’t need to pay the premiums if you are diagnosed by any one of the 12 listed critical illnesses
• It gives three death benefit payout options
• Premiums paid and received are tax free