A land loan is different from home loan

A land loan is different from housing or home loan granted by banks or financial institutes for those borrowers or buyers who aren’t ready to begin construction at this time or just wants to buy a plot.Most banks specify a limit for the loan-to-value ratio that they would finance for a land purchase. It could vary from 70 to 80 percent of the registered value. The maximum loan amount that banks or financial institutes lend for the purchase of a plot of land differ from one bank to another.

The repayment of the loan is through equated monthly installments (EMIs), just like in case of other home loans. However, the tenure of these loans is usually shorter – up to 10 years. The interest paid on the money borrowed for the purchase of land is not eligible for income tax deductions. However, once the borrower converts the land loan into a housing loan to finance the construction of a residential property, he can avail the tax benefits.

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Caution against unincorporated Lenders

Lending and borrowing is common in today’s world. There are number of banks and financial institutes come up with new scheme or offer to attract borrowers or customers. RBI cautioned public to verify the credentials before dealing with unincorporated lenders.

RBI caution public to verify the credential of bank or institutes before approaching for personal loan or paying processing fee for them. It is recommended to deal with bank or institutes who have years of experience in lending loans and advances such as personal loan, car loan and other long term loans.

The central bank said it noticed that certain entities are issuing a spate of advertisements in newspapers offering personal loans, loans against property and other loans, at a very low rate of interest. In the advertisements, these entities indicated their mobile phone numbers for the prospective borrowers to correspond, the bank added.

It has also come to the notice that some of these entities are cheating the public by charging processing fees upfront and disappearing thereafter. Reserve bank cautioned public before dealing with unincorporated lenders. Borrowers are advised to exercise utmost caution and verify the credentials while dealing with them.

Reference

RBI cautions public against unincorporated loan providers

Guidelines for Easy bank loan

Bank and financial institutes play vital role in helping you or customers to meet their immediate requirement and overcome financial debts. Good planning and market research helps you to get bank loans easily and payoff the debts without any burden or increasing your monthly expense. Here are some tips for you to get easy bank loan.

Tips for Easy bank loan

Right lender for your loan: It is important to get a right lender who offers special or attractive offers exclusively for you. First and important thing for bank loan is right lender. You must contact two or more lender before you choose right lender. It is important to take some time and be a little selective, when loan is for home loan or loan for long duration.

• Scheme: Some banks or financial institutes follow fixed interest rate or fluctuating interest rate. In some schemes, the rate is fixed, but only up to certain duration and subject to some terms and conditions. Therefore it is important to check the track record of interest rate and check the scheme for processing fee, penalty, late fee etc.

• Budget: In some case, interest rate may fall or be lower than interest rate when borrowing loan. In other case, borrowers will have to pay higher interest rate based on market condition and terms and condition of bank or lending company. Borrowers must have budget to afford higher interest rate or other expense relating to loan.

Take some time and make good market research to find the loan affordable by you and the lender who helps you to clear your debts easily. Right scheme and right lender plays vital role in getting loan easy and make prompt payment.

Easiest Way To Clear Credit Card Debt

Credit card is one of the easiest and convenient ways of paying for goods or service received. A financial institute allows agreed credit limit to their customer to buy goods or service. Bank and financial institute allows small short term loans for specific period and if the customer makes any default in paying the debts in specified period, interest or penalty will be charged on outstanding amount.

Tips for you to clear your credit card debts

If you use credit card responsibly, credit card can be great financial tool and if you use them carelessly, the same can put you in debt trap. You may be looking for best or easiest way to clear your credit card debts and bring your debts under control. Here are some tips for you to clear your credit card debt easily.

Don’t roll over credit: You must pay off your monthly debts in the period or time allowed by your lending company or bank. Roll over of credit will slowly lead you to debt trap. Pay off all your debts on or before due date.

Limit the number of credit card: You may have two or more credit card which makes you difficult to pay its due on or before due date. Limit the credit cards number to one or two and use them responsibly. If you want, you can use two credit cards one for daily purchase and other for bigger purchase. Remember, paying off credit card debt dues on or before due date enable you to get reward points and cash back.

Personal loans: Consolidate your credit card debts and take personal loan to clear all dues. Personal loan is cheaper when comparing the interest rate with credit card. Credit card charges high rate of interest or penalty for your monthly dues.

Loan from family or friends: You can take loan from your family and friends for paying off your debt or credit card dues. The advantage of such loans is they will not charge you interest and you need to pay only principal amount. You need to pay fixed amount in every month and prompt payment will enable you get more help from your family or friends in future.

Stop using credit card: If you are not able to payoff your monthly dues, stop using credit card until you clear all your debts on your credit card. When paying your monthly debts, pay more than minimum amount due in your statement.

If you use your credit card responsibly, your credit card is great financial tool for making payment for goods or service purchased and secured way to book online tickets and deal with online merchants. Remember to payoff your credit card debts on or before due date and never roll over your credit card debts. Prompt payment will enable you to get reward, cash back and increase in your credit limit. Keep your credit card debts under control and get most from your credit card.

Credit Card an Ease Loan for Your Requirement

Credit card provides you short term fund/loan for meeting your immediate requirement. Credit card is also known as world of plastic card which provides you an alternative method to pay cash when making purchase or receive any service. A credit card can be an asset for your business or lifestyle, but if you not handle them carefully they will put you in debt trap.

Credit card is simply a plastic card which enables you pay for transaction or service received. One of the main advantages of credit card is bank or finance companies charge no interest if you make prompt payment. Credit card enables you to meet your personal expenses such as shopping, trip or vacation, world tour, buying home appliance, fund for wedding or for other function, fund for emergency etc.

Main disadvantage of credit card is you become a liability for debts if you spend more than affordable by you. You need to spend only for those which you can make a prompt payment. If you use credit card for unnecessary shopping and spending, you will end to paying more interest for your debt every month.

While choosing credit card you need to choose bank or finance company which charge less interest for your credit and no annual fees or lowest fee for your credit card. Before signing for credit card you need to read terms and condition. Make transaction or spend amount which you can afford to repay. Make good research and contact more banks to know the best offer for your credit card. Never use more credit card two is more than enough for individual use.

Credit card can be best used for paying online transactions, pay your utility bills and your monthly telephone and mobile bills. Credit card enables you travel anywhere without taking risk of handling cash. For example, if you are planning to shop for furniture or home appliance around Rs 50,000/- you need not required to carry whole amount. When shopping you can either use credit card or make partly cash payment and remaining by credit card.

One of the myths in using credit card is users think card will make them liability for huge debts. If you have limited transaction in a month and the bill at the end of month is affordable by you, you can enjoy your shopping, family outing, friends or relatives wedding and even fund for emergency requirement. Learn to budget your monthly expense and manage your credit card efficiently.

Know Your Personal Loan

Personal loan is easy loan available to meet your personal requirement. There are number of banks and financial institute compete each other to offer personal loans. HDFC, Citibank, ICICI, Canara bank are some among them which provides personal loan. The loan amount and monthly EMI varies depending upon the profession, income, credit history and other factors.

Before applying for personal loan, you need to know about your lender and for what purpose you are using the loan. Some borrow personal loan for buying vehicle, new house or repair house. You can avail loan such as vehicle loan, home loan which offer more time and better option for repayment without having burden of loan.

Personal loan can be classified as secured loan and unsecured loan. Secured loan needs guarantor or collateral security when applying for loan. Unsecured loan needs no collateral security and easy documentation but interest rate is higher compare to other loans. When comparing personal loan and using credit card, personal loan is convenient and affordable.

You need to contact two or more lender before you apply for personal loan. Negotiate with your lender and apply for personal loan where you will get most benefit or which bank charge low interest. For example, Citibank offers 50% discount on processing fee that can be best utilized by you.

Remember personal loan is available easy and before adding a creditor to your credit history, know your need and lender. If you can manage without personal loan then it is wise. You need to stop impulse buying and spending unnecessarily to make your future secured. So when you apply for personal loan, know your need and interest rate offered by various lenders.

Personal Loan to Meet Immediate Requirement

All you need to know about Personal Loan

Banks and financial institutes give loans and advance for meeting your immediate requirement such as buying home appliances, Computer or Laptop, Holiday trip, marriage and so on. Personal loan is available for any person who is satisfies the criteria defined by financial institutes.

What is Personal Loan?
Personal loan is short term loan or advance available from banks or any financial institution to private individual without any collateral security based on their income, credit history and ability to repay. Personal loan amount can be any amount between Rs 10,000/- to Rs 15 lakhs for the period of one year or less than five years.

Why do you need Personal Loan?

The need for personal loan varies from person to person depending on their lifestyle and requirement. Personal loan is applied by an individual to meet his personal requirement such as desire to owe a home appliance, holiday trip, pay off credit card debts, buying laptop, marriage of his daughter or any relatives and so on.

Advantages of Personal Loan:

Personal loan is available for any person who meets the criteria defined by banks and financial institution. It requires no guarantor, security and collateral. Once you are qualified for loan, it will take only 24 hrs and some financial institutes require 7 working days to disburse the amount. You can extend tenure period for reducing monthly EMI. There is no penalty or charges for pay off loan before tenure period.

One of the advantage of personal loan is it requires less paper work and it is an easy source of money when you require money to meet an immediate requirement. Personal loans are very helpful for self employed individuals as they require fund in urgent for short duration other than their bank overdraft.

Eligibility of personal loan:

Eligibility criteria vary for each bank and some bank provides personal loans only to the existing customer who has account for more than six months. Other criteria are as follows:

• Government employee, salaried person, self employed businessman or professional.

• Age of 18 yrs and above.

• Individual is employed or in business for more than one year.

• Good credit history or capacity to repay the loan and its interest.

Documents required:

Personal loan is easy to apply and requires no collateral securities. It requires less document comparing to other loans. The important documents required are following.

• Proof of identity, it can be copy of your driving license, passport, employee id, Voters id or Ration card. Proof can be any one of them.

• Address proof which proves your residential address. It can be letter from your employer, copy of rental agreement or your ration card.

• Last three months bank statement and salary slip.

• Proof of your continuity in job. Either Form16 or copy of appointment letter.

• Proof of your educational qualification, copy of your SSLC and highest degree.

Repayment Options:

There are number of options which enables borrower to repay the amount without making any defaults. Banks or financial institutes grant loans depending on your credit history, ability to repay and monthly income. Repayment option varies depending on the amount you borrow and affordable EMI for a month.

Bank charges interest for personal loan granted to you. Bank offers primarily three type of interest rate.
• Fixed rate
• Floating interest rate
• Flat rate

Flat rates are considered most expensive when comparing to other interest rates. Choose loan where interest rate is calculated on the reducing balance. Banks has various band rates. Find out which band rate you fall under and negotiate to get lowest interest rate. Remember making prompt payment provides you good credit history and loan is easily available in future.

Repayment option adopted by some bank is simple and easy for borrowers. When borrowers apply for loan bank asks to submit all post dated cheques which are EMI for each month and these cheques are presented for collection on 1st of each month. You can deposit EMI in your account which will be transferred to your personal loan re-payment. This is one of the best options to repay your personal loan.

How to best utilize personal loan:

Personal loan is easily available and amount is sanctioned on your ability to repay. You can utilize personal loan to pay off debt which accumulated from credit card. Credit card companies charge high interest rate compare to personal loan. You can consolidate your debt and pay off with personal loan. Personal loan is very helpful to meet unexpected medical bills. It is important to know the terms and interest rate of personal loan before you apply. Plan well and utilize your personal loan wisely.

Things to take care when applying for Personal loan:

Do not apply for personal loan if you can afford or meet your requirement without them. Make a research in market on available offers and interest rate. Contact one or more banks to know the lowest rate of interest. Ask for loan which has zero processing charge or no penalty for pre-payment of loan. If no penalty loan is unavailable, apply for lowest cost. Do not leave anything to executive to fill up and do not sign any blank document. Make sure all offers agreed are supported in written. Choose EMI which can be affordable.

Important banks offering Personal Loan:

Citibank Personal Loan
HDFC Bank
Barclays Finance
State Bank of India
ICICI Bank
HSBC Bank
ING VYSYA Bank
Deutsche Bank
Kotak Mahindra Bank
Reliance Consumer Finance
Axis Bank
ABN AMRO Bank

Frequently Asked Question:

1. What is Personal Loan?
2. Why do you need Personal Loan?
3. What are advantages of Personal Loan?
4. What all documents are required for personal loan?
5. What are different interest rates for personal loans?