Personal Loan

Applying for a Personal Loan? Be Sure to Check Your Eligibility

There are numerous reasons why an individual might feel the need to apply for a personal loan. One of the best parts of availing a personal loan is that you can use the proceeds of the loan in any way that you see fit. The funds that you receive can be used to renovate your home, or to pay for your child’s education, or even for a car repair.

One of the terms that are commonly used with personal loans is the rate of interest. When it comes to the rate of interest, it is important that you avail the lowest possible rates as the Equated Monthly Installments (EMIs) that you’ll pay will be included as a huge part of your monthly expense. If you avail a personal loan with low-interest rates, it will help you save a lot. But availing a loan isn’t as easy as it is said; there are a lot of factors considered by the banks before they approve your loan application.

There are a lot of things that can affect your personal loan application approval. Here is how you can check personal loan eligibility.

  1. Credit Score:

One of the most important things on your application is your credit score. That is the first thing that is checked by the bank when you apply for a loan. Your credit score is important to the financial institutions and lenders because it helps them decide your creditworthiness and repayment capability.

The Credit Information Bureau of India Limited (CIBIL) keeps a track of your credit history.  All the financial institutions and lenders acquire your credit history from CIBIL. Your credit score is affected by a lot of factors. If you have defaulted on repayment of your previous debt then your credit score will be affected negatively, whereas, if you have paid all your dues on time them your credit score will be affected positively.

The CIBIL score ranges from 300 to 900 and financial institutions and banks are more inclined to approve your loan if you have a good score, i.e. above 750.

  1. Age Factor:

Age is another factor that is taken into consideration when approving your personal loan. If you are nearing your retirement, not a lot of financial institutions or lender will be forthcoming to give you a personal loan. This is because since you will retire soon, your only source of income will be your pension unless you decide to become a consultant. Your pension will be comparatively lesser as compared to what your monthly salary was.

Taking a personal loan 10-15 years before your retirement is a wise option since you will be able to repay all the debt by the time you retire. Your personal loan will be approved faster if you hold a stable job and have been earning for quite some time now.

  1. The Tenure of the Loan:

The loan tenure also affects your personal loan approval. If you avail a loan for a shorter period of time, your personal loan will be approved much faster and the EMI that you’ll have to pay is high. If you apply for a longer tenure of your personal loan, the EMI that you will have to pay is less.

The process of availing a personal loan has undergone a lot of changes since there is an increase of competition in the market. You can avail a personal loan anywhere between 5 lakhs and 1 crore. Different banks offer a different rate of interest and hence it is necessary that you do a proper research and only then avail a loan that has a low-interest rate.

applying for a Home Loan

Benefits for Women applying for a Home Loan

Around a decade ago, it was unusual for women to take a decision pertaining to finance. Most of the women even the working ones were heavily reliant on men when it came to financial investments such as insurance, investment and taxation. The only form of investment in which women actively used to take part was buying gold. However, the investment landscape has changed in recent years. Back to back initiatives taken by the ruling governments to encourage women to invest in financial sectors has paid off.

More women are inclined towards investing and making the decision independently. The situation has changed considerably, and women nowadays are open to taking risks and investing in not just financial market but real estate market as well. To encourage it even further, financial institutions are offering exclusive benefits to women to enhance their involvement. Among the benefits that are being offered to women, here are several outlining ones:

Rate of Interest:

When applying for a Home Loan, the rate of interest is considered to be one of the most pivotal factors. The interest rate differs from lender to lender, and almost every lender is providing benefits to borrowers who are women. Most of the financial institutions provide a discount of 0.05% interest to benefit women Home Loan borrower. The percentage might look pretty small, however, when it is compared to the bigger picture, it plays a significant role. The cost of the property is quite high, and even a number such as 0.05% makes a massive difference. Due of the lower interest rate, the EMI will be less and so will the financial burden when it comes to monthly repayment.

Concessions:

Every transaction related to property requires an investor to pay Stamp Duty charges to the State Government. It is one of the money components which differ from state to state. The amount that has to be paid is decided by the State Government. Government initiatives that help and encourage women investors include charging lower stamp duty rate when she opts to buy property as a sole borrower. The rate of interest that is charged by the government is 1-2% lower than the usual Stamp Duty rate. Apart from that, even if co-borrowing is opted for, discounts can still be availed.

Smooth Loan:

The loan process is same for both male and female applicants. It is a fixed process which involves the applicant to check eligibility and clear it. Once that is done, then he/she can avail a Home Loan. To ensure that this process passes smoothly, the borrower has to submit all the essential documents and identity proofs. Apart from this, a satisfactory credit score is essential. One thing which is noteworthy is that the ratio of women applications getting rejected is way less than men. It is mainly because women are more successful in repaying the Home Loans as compared to male counterparts.

Digitization:

The process of digitisation of financial services has made borrowing a Home Loan quite comfortable. The online service helps women to apply for a Home Loan as per their convenience. Thus, the process is no longer physically daunting.

Tax Benefits:

A woman, Home Loan applicant, can avail tax deduction of INR 2 lakhs. As per the Budget 2017, a woman borrower can claim a tax deduction on interest earned. Apart from that, if a Home Loan is co-borrowed between the married couple, then both of them can enjoy tax benefits on Home Loan. Opting for co-borrowing is a wise choice as it helps to share the burden of debt.

These are few of the factors that a woman Home Loan buyer shall consider to make the most out of it.