06 Jun, 2012 By:
A car is a prized possession and counts second (after home) as the highest paid purchase of a person. Buying a car is no longer a forte of the elite class, there has been a significant rise in car purchasing amongst the middle class in the past few years. Availability of auto loans with reasonable interest rates has played a pivotal role in the booming auto industry in India. Those who are planning to buy a car in the near future should consider some important factors regarding auto loans.
Budget Estimation :
Whether it's an Aston Martin, Maybach from Mercedes Benz, Hyundai Santro or Chevrolet Spark, one can buy any specific car he has his eye set on, only if he has his budget calculated. When shopping for cars, most people begin with selecting the car first and then realizing that they can't really afford it. Shopping begins with considering one's needs, likes and usage. Afterwards, an estimation of the amount of money at hand and the amount required to be borrowed comes into play.
Down Payment :
Purchasing a good car with full payment is next to impossible. Therefore, options of a down payment and convenient EMIs are offered to buyers. Making a substantial down payment is important to keep one from paying more than the car's worth. The minimum down payment for any vehicle varies from one car manufacturer to another. The key is to up the down payment. Calculate the payment in a manner that the buyer gets to witness some positive equity in about two years. It's important to make the EMI term as short as possible.
EMI Calculation :
The buyer, after consulting the car dealer, should make use of EMI calculators that are available on pretty much all the auto loan websites. These EMI calculators give the buyers an estimation of the monthly payments, total amount with interest, total interest amount, yearly interest amount and flat interest rate per month based on the interest rates, loan amount and loan tenure.
Interest Rates :
Interest rate is also a decisive aspect of buying a vehicle. A good amount of effort is required on the buyer's part here as he will have to check the interest rates on offer by various institutions. Visiting websites of various lenders is the convenient option as he can compare them with ease. One must check with at least five different lenders and go with one that offers minimum interest rates as well as lowest EMIs.
Valuable Consideration :
When it comes to loan tenures, financing institutions may offer periods as long as 10 years which normally lowers the EMIs. One should not be fooled by such misleading circulations. A less expensive car is way better than longer loan tenure. Having to pay for such a long time will lead one to pay more than the car is worth and he won't even be able to sell it halfway without losing any money. Therefore, one must consider down payment, EMIs and loan tenure before making a purchase.
06 Jun, 2012 By:
In this tough economy, it's a rare instance to see money clocking in. Over and above, some of us have to make a bit more efforts than others to make ends meet. House rents, bills, child's education, groceries, transportation expense and other monthly payments altogether add up to the amount on the paycheck. We are barely left with amount to be socked away and if any additional requirement of funds surfaces, we are left with no choice at all than to borrow.
People with no assets and a jam-packed budget can avail personal loans in case of a requisite which can range from home renovation to consumer goods investment. As the name suggests, personal loans are meant to cater to the personal monetary requirements of an individual. Whether one is planning an overseas vacation, a fancy wedding or has an unanticipated medical emergency; personal loans are the quickest ways to get the money right away.
The amount for personal loan varies from one lender to another and ranges from 50 grands and all the way up to 15 lakhs whereas its return period can be anywhere between one to five years. Additionally, personal loans don't require collateral or security and the interest rates are significantly lower than other kinds of loans. Henceforth, one doesn't have to worry about repayments – several convenient EMIs will cover the loan with ease. There are several benefits of personal loans:
Personal loans are quite advantageous because of their flexibility and multiple kinds of purposes. Be it travel expenses, medical bills, shopping anything from designer jewelry items to gadgets and gizmos, home improvement costs or others, personal loans are the convenient options.
Another benefit of personal loans is it's rushing process as they are considered ASAP. In case of an exigency, such loans can be availed within 24 hours of applying. Personal loans are the best bet for those looking forward to getting an urgent capital.
The next in list is its hassle free process. As opposed to other kinds of loans, personal loans don't require a cluster of forms to be filled out. Documentation is minimum in the process of getting a loan which leads to a quicker response time.
Any kind of collateral or security isn't required to apply for this loan. Unlike other sorts of loans, one doesn't have to use his assets against a loan. If the borrower is unable to pay the debt, his assets aren't seized.
These attributes of personal loans make them attractive to most people but the question is whether or not one should apply for them. It solely depends on the individual – if he is in the pressing need for quick cash and has no assets, personal loan is the sensible choice. However, he should commit himself to repaying the debt within specified time frame because failing to do so will land him in legal disputes.
06 Jun, 2012 By:
Having a home is a cherished dream of an average Indian. Due to the skyrocketing prices of property, many people have held themselves back from buying their dream homes. But courtesy of home loans, this far-fetched dream has turned into a close reality for many. Whether purchasing an already-built house or constructing it from the ground up, finalizing on one takes plenty of time and effort. Additionally, deciding on the home loan is one of the most crucial aspects of buying a home. Thereby, one must be considerate of several important factors when making the decision.
Type of Property :
An Indian citizen (resident or NRI) considering a purchase of a property is entitled to apply for home loans to an accredited financial entity in India. Before applying for the loan, one must consider the kind of property he is looking forward to buy. Lenders offer home loans for three different kinds of property:
ready to move in home
construction on a pre-owned plot
under construction house from a third party
Repayment Options :
Once one has decided on the property type, he must research on the loan repayment options provided by various banks. Factoring in different aspects like property prices, borrower's income, his previous repayment records, etc., the lending financial institution decides on the loan amount and repayment structure.
Several institutions allow borrowers to switch from floating rate home loan to fixed rate home loan. Adding to that, a no-penalty option is also on offer by a few financial institutions wherein one has the option of prepaying up to 25% of his loan each year. These options can make repayments extremely convenient for the borrower. Therefore, it's of utmost importance that the borrower does his homework on differing options on offer by various lenders.
Loan Period :
All kinds of loans available in the market are offered for different time periods. A person can opt to repay the loan within five years or take up to as much as 25 years. One should keep in mind two aspects here:
the longer the loan period, the more interest to be paid
the longer the loan period, the more tax benefits
Aggregate interest and tax benefits are the two main concerns for the borrower and he must give a deep thought to his repayment capacity, higher interest rates and longer repayment period, prior to making a decision. One can take help of friends and family members to aid in making a balanced decision so that he doesn't end up losing a fortune over repayments.
Due to the high property prices, chances of getting a loan passed for the required amount are less. Therefore, several banks let loan co-applicants combine their incomes in order to increase the loan amount. The repayment installment amount is divided between both the applicants which makes it convenient. Pretty much all the lenders allow co-applicants to apply for home loans, but the definition of co-applicants differ from one lender to another – spouse, parents, siblings and children come in the category.
27 May, 2009 By:
A house to live is a basic necessity for every person. Banks and other financial institutions offer home loans to people who meet the required eligibility criteria. It helps those people who can not afford to pay the full price of a house.
To avail of the facility of a home loan you need to have certain qualifications. The eligibility criteria are related to a person's age, income, past repayment history and the cost of the property. It also considers the person's work experience, number of dependents, spouse's income, stability of income and employment, assets, liabilities, etc. Banks normally lend up to 3-4 times the annual gross income as a home loan. Every bank has its own set of eligibility criteria that may differ slightly.
Banks need certain documents at the time of applying for a home loan. The types of documents may vary, though normally those include proof of age, proof of identity, proof of residence, salary slip of last three months along with salary certificate, proof of continuity in job for last two years or Form 16, bank statement for last six months, proof of business address in respect of businessmen, etc.
Due to the booming Indian economy, there is a lot of competition among banks to offer various kinds of retail loans to people. The banks keep cutting interest rates and keep offering attractive terms and conditions to lure customers towards the banks. Owning a home of own is a dream, which is easier to realize now.
21 May, 2009 By:
People go for various life insurance policies due to their many benefits. The amount of life insurance depends on many factors. Ideally the sum assured should provide for all the needs of your family like children's education and marriage while meeting the daily basic expenses when the insured person is no more. It may not be an easy decision to make. First of all, your income level has to permit you to opt for the policy that you want to take. Your need may be more than the disposable income you can spare for paying premiums. Even if you want a higher sum assured the insurer need not oblige you citing your income.
There are many factors that influence the kind of insurance amount a person needs. One way of doing it is to calculate the level of income a family needs to maintain its standard of living when the breadwinner is not around. For example if a family's present need is Rs 20,000 p.m., then the extent of life insurance for its earning members should be such that interest income from the sum assured can meet the family's monthly expenses of Rs 20,000.
Age is also a big factor in deciding for insurance amount. Young people with no dependents may not have much need for life insurance. As one's family responsibility grows, there is need for life insurance. When one is single he may not bother much about life insurance. However, at middle age a person having children will feel the need to have a bigger amount of life insurance as the need to give good education to children and marriage expenses will dog him. Thus, a periodic review based on your family circumstances is required in order to ensure that the coverage is adequate. A person employed in some hazardous profession will need more life insurance cover than an ordinary individual.
In fact, the amount of insurance one should buy is dependent on his/her economic value, which is also called human life value. It can vary depending on individuals.