October 24, 2021

Factors to Consider Before Opting for a Home Loan Balance Transfer

Sep 30, 2021

A home loan balance transfer is an excellent facility offered by the financial organisation that eases the repayment burden for home loan borrowers. Read on to know more about it.

A home loan balance transfer is the process of moving your home loan from the existing lender to another one and repaying the outstanding amount at a lower interest rate.

If you have taken a home loan, and your lender is charging you a high interest rate, you can avert paying a high EMI by choosing the home loan balance transfer option. However, before you go for the balance transfer, you must consider a few essential things.

  • Negotiate the interest rate

Before exercising the option to do balance transfer, it is better to negotiate with the existing lender to revise your interest rate. Suppose you have a loyal association and have a long-term relationship with them and have paid all the EMIs on time. In that case, the lender may consider your request based on your credit history and past repayment track records. This way, you can lower your EMI burden without paying any charges associated with the balance transfer.

  • Check your credit rating

Your credit score plays a vital role in determining if you are eligible for the balance transfer or not. If you have paid all your EMI previously on time, your credit score must be high. However, if you have been inconsistent with your dues, it would reflect poorly on your credit score.

So, before you opt for the balance transfer, ensure to pay off your previous dues so that your credit score is high and you can complete the transfer process without any hassles.

  • Be wary of the remaining loan tenure

Opting for a home loan balance transfer during the latter half of the tenure may not be worth it. If you have only a few years to pay off the existing loan, you may have already paid off a significant portion of the interest payable during the initial years. In this case, refinancing the home loan may not be a wise decision as you may end up increasing the interest cost on your new loan. So, it is better to use the home loan balance transfer calculator to compute the interest payable on the new loan before taking the final borrowing decision.

  • Term and conditions of the new loan

Lastly, you must be aware of the term and conditions of the new loan. Make sure that you read the fine print carefully before you sign the home loan balance transfer papers. While the idea of repaying the balance amount at lower interest may seem enticing, you must fully understand the terms and conditions. You must refinance the home loan only if the terms and conditions are beneficial to you.

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Home loan VS home construction loan

Sep 24, 2021

The home loans are the ones that are taken for the purchase of the flat or the row house from the real estate developer. While as the home construction loans are the loans that are taken by the individual for the construction of their homes on their individual plot. The interest rates charged for both the purpose are same and thus are considered as similar kind of loans. The home loans can be availed at an interest rate as low as 6.50% per annum. The home loans can be availed by the borrower from any of the banks irrespective of he/she has a bank account at any of the banks. Ideally, the bank which has got a good reputation in the markets and the ones that charge the lowest interest rates and processing fees should be taken into consideration while applying for the loans. The individual borrower should have a good credit score while applying for the loans. The bank expects a minimum score of 700 points for the application of the loan to get approved. The home loans interest rates are reducing on a gradual basis as and how the repo rate of the RBI is getting reduced.

The home construction loans can be availed 80% of the project cost including the interiors of the house. The bank requires proper income proof for the disbursement of loans. An independent bungalow can be constructed on the plot by availing of loans. The project cost is estimated by the bank officials and accordingly, only the loans can be approved for an individual. If an excess of the amount is demanded by the applicant beyond the basic project cost the bank may reject the loans of the borrower. The home loans when purchased as a ready possession flat or a ready possession row house then in that case the total cost including the land cost and the construction cost is taken into consideration and accordingly the loan amount is approved. The home construction loans are approved only if the applicant has a plot of their own with clear titles then in that case home construction loans are approved. The home construction cost is estimated according to prevailing rates going on of the construction contractor and according to the FSI approved by the town planning authority. The housing construction loans are approved on similar conditions as the ones for the home loans.

Benefits of home loan:

  • The borrower can claim tax benefits under income tax 80C on the principal amount and section 24 under the interest repayment. The borrower can continue to avail of tax benefits as long as the tenure extends for the loans.
  • Availing loans can help individuals keep their existing savings locked into financial instruments and repay the loans from the running income.
  • The loans help the borrower repay loans for a longer span of time as long as 30 years, depending upon the age of the applicant.
  • For the first time, home buyers can avail subsidy of Rs.2.67 lakh from the PMAY scheme being launched by the government.

Difference between home loans and home construction loans:

  • Though the interest rates charged by the bank for home loans and home construction loans are the same, the home construction loans are charged a bit lower charges than the home loans.
  • The total loan amount in the case of home loans is calculated on the construction cost and also the cost of the land. While as the home construction loans the land cost is excluded and only the home construction cost is included for the approval of loans.
  • Home construction loans can be availed only if the individual has his own plot. While the home loans can be availed even in case of an individual not having their own plot.
  • The home loans are approved based on the total cost irrespective of the transaction value. While as the home construction loans the cost of the construction
  • The home loans can be disbursed by the bank at one go. While the home construction loans can be disbursed only in part installments as and how the progress is there of the construction of the house.
  • The home loans can be approved for a longer tenure while the home construction loans can be approved for a shorter tenure.
  • The documentation required for the home loans is different from that of the home construction loans.
  • The limit up to which the home loans can be approved is higher depending on the locality in which the property is purchased. While in the case of home construction loans the cost of construction is similar at any location only the minor variation can persist thus the number of loans approved can be lower compared to home loans.

Availing the home loans or home construction loans totally depends upon the situation of the individual. If the individual owns a plot then home construction loans can be taken while as in case if the individual does not own the plot then case home loans can be taken. The interest rates charged & other conditions of the loans are one and the same while there could be minor differences in the interest rates and processing fees been charged by the lenders.

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4 mistakes to avoid while taking a loan in Singapore

Aug 16, 2021

Taking a loan in Singapore has become a way of financial management for most of the people nowadays to ease their financial woes. And to make matters easy for you, there are several moneylenders in Singapore who offer a low interest loan at attractive terms and also work out the best possible payment terms for you. If all goes well, you can get a fast loan in Singapore without any collateral as long as your credit score is good.

 

A good credit score is very important while applying for an instant loan in Singapore. It indicates that you have a stable financial life and a good repayment track record. A high credit score is a key factor for obtaining a loan in Singapore and licensed moneylenders or banks might even reject your application for cash loans if you have a poor credit score. Credit score not only helps in assuring moneylenders that you would repay the loan on time, but also in helping you get the best low interest loan.

Honestly, chances of you getting that urgent loan can be few if you don’t get the right guidance on time.  In this article, let’s now take a look at the 4 mistakes to avoid while taking a loan in Singapore:

Not paying your existing loans and credit cards on time: Failure to repay your loan EMIs or credit card payments on time is bound to affect your credit score adversely. This might cause an obstacle when you apply for a loan in Singapore. Similarly, not repaying your credit card dues on time will also cause a problem while applying for money loans.

A very high debt-to-income ratio: One of the most important elements of maintaining good financial health is to keep track of one’s debt-to-income ratio.  The calculation is easy and you just need to divide your monthly EMIs and debt repayments by your monthly take-home-salary. The lower the number obtained is, the better it is. For instance, if you have a monthly loan burden of $1000 and a salary of $5000, your debt-to-income ratio would be 0.2, and if your loan burden is $2000 then the ratio would be 0.4.

A common mistake that many people make is to take more money loans or make more purchases through credit card as soon as they get a higher credit limit or their income increases after a promotion. This leads to a rise in their debt burden and the debt-to-income ratio which might make it difficult to get another loan in Singapore.

The ideal scenario is to ensure that your EMIs for money loans don’t exceed 10% of your net monthly income. Cut down on excessive borrowings and live within your means to avoid taking loans for lifestyle needs. This will help you in keeping the debt-to-income ratio low and make it easier to obtain a fast loan in Singapore when needed.

Not doing research: When you apply for a loan in Singapore, you must do a thorough search about the lender and the money loans on offer. This will help you find a low interest loan. You can easily search for an online loan from a reputed moneylender nowadays. Further, you must find out the finer details about the loan before taking an instant loan in Singapore. You should find out what are the penalties, processing fees, interest rates, late payment charges and if there are any other hidden or variable costs. This research can let you compare different options and take the best fast loan in Singapore.

Applying for too many money loans: Last, but not the least, a lot of people apply for multiple loans as they need urgent funds for their pressing needs. This need for instant loan in Singapore might make the person apply to several moneylenders at the same time. Each of the loan requests is going to reflect on the applicant’s credit score, and if too many requests come simultaneously then it can lead to a negative impact on your credit score. Taking a loan in Singapore is not a bad thing at all, but you must be aware of these pitfalls and apply for an online loan smartly after doing all your research and calculations.

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You may not get your Home Loan approved if you are missing out on these documents!

Jul 23, 2021

Furnishing adequate documents is an indispensable part of the home loan process. It is through your documents that the lender gathers information about you and assesses your eligibility. Also, documentation helps you keep a record of the money borrowed as well as repaid for purchasing your home. However, often people miss out on submitting the required documents. Even if they do furnish the documents, they are incomplete or dated, which leads to rejection of home loan application. Lenders do not approve your home loan application unless you submit accurate and complete documents. Therefore, before applying you must know the documents needed with a home loan application.

If you wish to apply for home loan, ensure that you do not miss out on these documents.

KYC documents

Your KYC documents are crucial for a home loan. It includes your age, address proof and identity proof. There are various documents that you can furnish for KYC compliance. Some of them like driving license, Aadhaar, etc., can be used as an identity as well as address proof.

Income documents

The lenders ask for your income documents to check your creditworthiness and repayment capacity. It helps them assess if you have a stable source of income to repay the loan. Lenders ask for a copy of the bank statement, passbook and salary slip to verify the inflow of income, and income tax returns. In case of self-employed individuals, additional documents to support the application would be needed.

Property documents

There are some property documents without which you might not be able to get the home loan at all. For example –

  • Chain of ownership

The chain of ownership traces the property to its first owner and identifies how the property has been transferred from one owner to another. It helps confirm that the seller has the right to transfer the property and is the legitimate current owner.

  • Property’s approved plan

This is crucial to ensure that the property is legal and has been constructed in compliance with all the laws and rules in force. When you have an approved building plan, it means that no authority can put an objection to it or demolish it. The approved plan also confirms that the property has all the legal permissions and is authorised by civic authorities.

  • Encumbrance certificate

Encumbrance certificate is crucial to ensure that there are no pending dues or mortgages on the property in question. The lenders ask for this document to know all the details of the transactions carried out about the property.

  • Receipts of tax and dues

Lenders also need to ensure that the seller has no pending dues of the society or authorities. They can also ask for an occupancy certificate which would confirm that the municipal authorities have no objection to the sale and the seller has no pending tax dues. These documents also add as an additional proof of the ownership and possession of the property.

All the lenders more or less have the same set of documents required for a home loan. However, depending on their policy, there could be some additional documents that they could ask from you. While all the documents are equally important, it could be challenging to get a home loan approval without these documents. Therefore, before you apply, ensure to arrange these documents required for a home loan.

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Best Places to Look for Private Money Loans

Jul 15, 2021

Private money loans are an excellent investment instrument for anyone looking to invest in real estate but can’t get a traditional loan or don’t want to. Here are some ideas for where to look for an excellent private quick credit money lender:

  • Mortgage Consultants
  • Realtor
  • Attorneys
  • Financial advisors, accountants, and CPA’S
  • Investment Clubs
  • Real Estate Seminars
  • Mortgage Consultants
  • Investment Clubs
  • The internet

Who are Independent Money Lenders, and what do they do?

Private money lenders can range from private individuals to hedge funds, institutional investors, portfolio lenders, real estate brokers, REO (bank-owned property) agents, and even family members or friends. Short-term loans from private money investors come with a higher interest rate and some upfront costs.

The number of points awarded might range from four to ten. Private investors are more interested in the property’s equity than in your credit. You should have no trouble finding a private money lender to assist you if you have a property with equity and a plan in place to repay them. Here are the benefits of commercial money lenders:

It offers a lucrative investment opportunity. 

It may make more sense to seek out a private money investor in tight financial markets like those we see right now. Why should you miss out on a lucrative investment opportunity because you can’t acquire standard financing? A private money loan, often known as a hard money loan, is typically a short-term loan.

 These loans appeal to investors because they need money immediately, so they don’t miss out on a lucrative investment opportunity, such as a pre-foreclosure or real estate foreclosure auction, where time is of the essence and having cash available soon is important.

The Federal Reserve regulates commercial lenders.

Traditional lending institutions have tightened their lending rules in recent years due to the large number of foreclosure losses they have experienced. Commercial banks are governed by the Federal Reserve and are required to follow tight lending laws and regulations. It adds a lot of red tape, delays and makes it harder for people to receive loans or get them fast.

Despite the government’s efforts this year to alleviate the tight credit markets through financial rescues, acquiring a loan is still a source of irritation, and the procedure can take weeks. Unlike commercial transactions, private transactions are not governed by state or federal legislation. As a result, private money lenders can make a decision more quickly. Individual money lenders may have different policies in place, such as assessing credit, verifying references, or validating employment. On the other hand, most private lenders are concerned about how quickly you can repay them and whether or not the home has equity.

Make a list and start looking for financing.

When working with private quick credit money lenders, it’s a good idea to have a list of properties you’re interested in so you can contact your private lender immediately away when you find one. You don’t have to be anxious about financing, and you’ll be able to focus on negotiating your contract.

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Consider Taking Private Moneylender Singapore Loans

May 12, 2021

Private moneylender Singapore offers are often a suitable alternative financing alternative. The paperwork is minimal and hassle-free; receiving an approval is much easier to get. Private money is asset-based. The authorization comes from the worth in the property, and never ever the consumer’s credit score of monetary history. In private money, the property or collateral is the debtor’s residential property or company. For bank loans, collateral is regrettably the debtor’s personal car or residence. Financial institutions are under government constraints when it involves authorizations and private money lenders are not.

Difference in interest rates and terms

Both banks and private lending institutions will need some form of ahead of time settlements or commitment fees, but many banks require upfront application fees even before an authorization. Terms and prices vary dramatically for each as well. Financial institutions normally offer lower interest and a fixed rates to be settled over specified years IF you can get an authorization. Varying, (flexible) terms could mean that payments become more expensive in time.

Private money lenders tend to have higher rate of interest on their bridge loans, but loan to a series of credit ratings and provide a temporary repayment routine. Terms are likewise able to be made more adaptable when it involves bridge loans and do not vary. On the other hand, banks have rigorous guidelines and criteria they need to follow when it involves specifications for lending cash.

Common uses of private loans

Make Home Improvements

If you’re wanting to add a new space to your house or buy a new COOLING AND HEATING system, you could take into consideration resorting to a personal loan

Pros described: If you are in need of an urgent residence repair, a personal loan may be among the fastest means to obtain the money you need. You can generally obtain your money within a couple of business days. And also, some choices include loans backed by your home, meaning you could lose it to repossession if you do not make your payments. With a personal loan, you do not deal with that danger.

Disadvantages clarified: Personal loans generally feature greater rates of interest than house equity loans, which could eat away your residence improvement budget plan.

Alternatives: Depending upon the extent of the project, you might think about undertaking more affordable debt. Home equity loans let you access the equity developed in your home, usually at reduced rates. A cash-out refinance entails securing a new home loan for a greater quantity than you presently owe and after that taking the balance in cash, which you can then make use of for whatever you desire.

Covering emergency situation clinical costs

You may not always have that extra cash to spend for emergency medical expenses, after all they do not constantly happen by choice. When this takes place, a personal loan can offer the funds you require for such unforeseen events so you can concentrate on recuperating to get yourself back on track!

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Is it Better to Take a Home Loan or Pay Cash while Financing Your New House?

Apr 26, 2021

Buying a house is not a child’s play. A huge investment requires a meticulous thought process, financial balance and robust decision-making power. So, when it comes to financing the property, it could be a tricky decision. Should you spend your cash or opt for a home loan?

If you have been thinking about purchasing a house, you might have faced this dilemma. Scroll through for some information below in order to aid you in effective decision-making.

Cash Payment

Pros

  • Sole ownership – When you pay through cash, the sole ownership is with you. No bank or financial institution has any stake in your property.
  • Negotiation – Typically, you are in a better position to negotiate when you have cash. You also save money, as there is no interest cost to be borne.

Cons

  • Your savings can get blocked – If you buy a house through cash payment, a major portion of your liquid funds could be blocked in a single asset. It can reduce the chances of diversification.

It is recommended to buy a home through cash payment only when you have ample amount of funds to meet any emergency or future expenses. Making cash payments should not jeopardize your budget, investments or liquidity.

Home Loan

Pros

  • Tax benefits – Through a home loan, you can enjoy tax benefits and save money. When you avail a home loan, you can claim deduction of up to Rs 1.5 lakh on the principal repayment and up to Rs 2 lakh on the interest payment from your income under the Income Tax Act, 1961. Additionally, you can also claim a deduction of Rs 50,000 on the interest from your taxable income, if you are a first time home borrower.
  • Improves credit score – Through timely repayments of your home loan EMIs, you can improve your credit score. A good credit score can help you avail loans in future at better terms.
  • Liquidity – When you take a home loan, you are not usually bound by the amount of cash in hand. With a home loan, you can purchase a better house in a better locality. Additionally, availing a home loan leaves you with liquid money for other lucrative investments, aiding diversification.

Cons

A home loan can be an added debt and put pressure on your finances. In addition, as the repayment amount includes interest, you could be paying more than the cost of the house. However, with flexible repayment, you can opt for comfortable EMIs and repay the loan.

Conclusion

It is imperative to consider different aspects such as your age, financial condition, existing liabilities, intent, etc. while taking the decision. Experts opine that you should also consider your long-term goals and needs while choosing between the two. Paying through cash could seem like a cheaper option, but it can hamper your liquidity and retirement goals. Therefore, consider the pros and cons of both the options carefully and accordingly make an informed decision.

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Factors affecting your home loan eligibility

Apr 4, 2021

Are you planning on getting a home loan? If yes, your first step in the process should involve checking if you qualify. The easiest way to do this is by using the home loan eligibility calculator offered by various lenders. It enables you to ascertain your qualification instantly without any hassle.

It is an essential part of the procedure as banks, and financial institutions have stringent parameters to evaluate your application. Being prepared is the only way to pass their verification and get your loan approved. It is also an excellent means to plan for the biggest financial responsibility. It helps to know the factors affecting your eligibility for guidance.

Here are some of them:

Age: It is an indicator of how many years you have left to repay the loan. As home loan comes with a tenure of up to 30 years, it becomes an essential factor. If you qualify for the loan by a bit of chance, lenders adjust the risks by extending the loan period and instalments. But if your age does not allow for it, it automatically impacts your eligibility.

Credit score: It depicts a clear picture to the lenders of how you handled your past financial obligations. Your timely repayments and debt clearance show your financial credibility, which is used to calculate home loan eligibility. You must have a credit ranking of 750 or above to avail of the loan. Hence, make sure to check this beforehand and fix it before applying for the same.

Income: It is the main component considered for your home loan eligibility as you pay your equated monthly instalments with it. The criteria differ for the salaried and the self-employed. It also varies depending on your location as metro cities have higher income compared to rural areas. Lenders usually assume that 40-50% of your payment will get contributed towards the loan. So, having higher revenue helps you get better deals and determines if you qualify.

Employment status: Your earnings can include fixed sources and variables. For instance, you are allowed to have your investment returns, rental income, dividends, etc., in your income. However, your primary and fixed source is always through your employment. Therefore, lenders check the nature of your work and its stability to understand your financial standing.

Existing financial obligations: Your current EMIs show your income distribution to the lender. If you have too many loans, credit card dues and other commitments, it negatively affects your debt-to-income ratio. Hence, it is essential to clear them before you apply to have a reliable income for repayment. This increases your eligibility for home loan.

Dependants: It refers to your spouse, parents, children, etc. It is also an aspect that most lenders consider while deciding your home loans eligibility. This is because the number of dependents you have affects the disposable income you have.

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How to Go About the Process of Applying For a Business Loan

Feb 24, 2021

If you are a business owner, then you may be experiencing a difficult period due to the global situation. Indeed, if you are looking for a short-term injection of finance for your business, you should consider the various options that are available. You could choose to apply for a loan from a more traditional type of lender while you may have to provide some form of collateral against a particular loan. However, you should also be aware of a variety of other solutions if you require a short-term injection of cash for your business. Furthermore, if you are looking for an unsecured business loan, you should consider a number of online providers as they may be able to give you the finance that you need without having to provide a considerable amount of collateral. For more information about online providers that can give you an unsecured business loan, you should think about consulting an online business directory as you can identify a variety of providers that you can contact.

  1. Take your time to choose the right lender

If you want to go about the process of applying for an unsecured business loan, you should think about the various options that are available. Indeed, by taking your time to find the right provider for your requirements, you can ensure you are able to meet the repayment terms. Furthermore, you should also understand that an unsecured business loan will not require you to put up a considerable amount of collateral against the amount of the loan.

  1. Choose the best type of loan for your financial situation

In addition, you should also be aware that a number of unsecured loan providers are available on the Internet while you should take your time to choose the best type of loan for your financial situation. This is especially pertinent if you are looking for a short-term injection of cash for your business as you may not have to provide collateral to the lender.

  1. Compare a variety of potential lenders

Lastly, it is important to understand that you should take your time to compare a variety of different companies so you can understand the interest rates that are available as well as the repayment terms that are on offer from the different lenders. By taking your time, you can make an informed choice about which particular loan would be appropriate for your needs.

  • Take your time to choose a lender
  • Choose the right type of loan
  • Compare several options

Therefore, in conclusion, if you will be applying for a business loan in the future, you should take your time to consider which particular option would be appropriate for you, while you should also think about the best type of loan for your financial situation.

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What Is the Difference between Unsecured Loan and Secured Loan?

Jan 14, 2021

While most of us wish to have a cash-only lifestyle, the truth is that you cannot avoid credit throughout your life. Even the most financially disciplined individuals rely on loans when faced with an unexpected expense or when they want to buy big-ticket items.

 You may be forced to borrow money when you want to purchase a car or house, open/grow your business, pay for college, or cover an unexpected expense.

When considering your credit options, you need to decide between secured and unsecured loan.  Understanding the difference between these two terms can help you make an informed decision which can have a long-term effect on your financial health.

In this post, we discuss the difference between secured and unsecured loans while highlighting the pros and cons of each.

Secured Loan

Secured loans are typically protected by an asset.  Sometimes, the item purchase with the loan such as a car or home serves as the collateral security. In such a case, the lender will hold the logbook or title deed until the loan is paid in full. Other items such as bonds, stocks, and valuables personal property can be used to secure the loan as well.

Secured loans are the most common way to borrow significantly huge amounts of money. In this case, the lender is only willing to lend you huge sums of money on the promise it will be repaid in full and on time. Putting your home or car on the line is a good way of reassuring the lender that you will do all you can to repay the loan amount plus accrued interest on time.

A secured loan means that you are providing security that you will repay the loan amount plus accrued interest.  As such, you enjoy relatively lower interested rates and longer repayment terms.

However, failure to repay the loan on time can be catastrophic. The lender may sell your collateral to recoup the loan amount, causing you to suffer a double loss.

Unsecured Loan

On the contrary, an unsecured loan doesn’t require any collateral though you are still charged relatively higher interest rate and sometimes fees. Personal loans, student loans, credit cards, and a no credit check loan are all perfect examples of unsecured loan.

Since there is no collateral, lenders mostly give out unsecured loans based on your credit score and history of repaying debts. But it isn’t uncommon to come across an online lender offering an unsecured no credit check loan.

You can take out an unsecured loan for almost any purpose. Whether you want to pay for a wedding, finance your holiday, pay off your credit card debt, or renovate your kitchen, an unsecured loan may be the best option for you.

In most cases, an unsecured loan lender will approve your loan request because he/she believes that you have the financial resources to repay the loan on time. Therefore, you will be judged based on your character, capital, capacity, and conditions.

You need to assess all these conditions before applying for an unsecured loan to increase your chances of approval.

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