The biggest dilemma for a person with ZERO credit history is how to increase CIBIL Score? The banks and financial institutions are not willing to approve a loan to high risk borrowers including loan applicants with zero credit history. It's a classic situation faced by a fresher seeking first. Companies are not willing to hire a fresher, however, if they will not get the opportunity to work in a corporate then how they will gain experience. Similarly, if the person with zero credit history will not get a loan then how they will build and improve their credit score. The good news is that now ... Read More
Personal Loan Eligibility – Five Golden Tips To Increase
Recently I received a query from one of the readers of my blog Mr. A regarding personal loan eligibility. He asked me that he is in an urgent need of money but the bank is not willing to lend the desired amount. As I shared in my other posts related to a loan that loan eligibility depends on multiple factors. There are 2 types of factors i.e. direct factors and indirect factors. Let's accept the fact that only direct factors are in the control of a borrower whereas for indirect factors you can't do much. Some readers asked me what these indirect factors are. One of the indirect factors is the ... Read More
Should i Invest or Prepay Loan?
Should i Invest or Prepay Loan? is the classic dilemma faced by the borrowers. This catch 22 situation arises when a borrower receives a lump sum amount. The most common sources are an annual bonus, the maturity of deposits, a gift from parents/relatives or inheritance. Normally i don't suggest to prepay loan especially Home Loan from any amount received through inheritance or gifts from parents / relatives. The only exception is if you have signed proper gift deed or family settlement agreement to safeguard your financial interests. If you prepay loan from gifted/inherited money then it may ... Read More
Loan Against Salary for Financial Emergency
Loan against Salary is one of the least exercised options during a financial emergency. In my previous post on the same subject, i discussed Loan against Insurance Policy. The objective is to share all the possible alternative sources of funding with my readers. I get disoriented when any of my readers is not able to raise funds at the time of urgent need or financial emergency. Due to the myopic view of Personal Finance, a person will never come to know that he can raise funds through existing resources / assets. Loan against Salary is one such option for salaried class which is least known ... Read More
Loan Against Insurance Policy
Loan against Insurance Policy is not so very common in India. One of the major reason is that the most of the policyholders are not aware of this option. Secondly, the penetration of insurance is very low in India. In fact, i believe that if we remove Income Tax benefits attached to the Insurance Policy then penetration will be negligible. Insurance Premium is either considered as a waste of money or is paid for investment purpose. Both, India psychic and Insurance industry are responsible for this sorry state of Insurance products. By now most of my readers know that i have traditional ... Read More
Impact of Low Value Loan on CIBIL Score
Loan in any form is not good for financial health of an individual specially low value loan. I don't believe in Good Loan or Bad Loan, it should be avoided (If possible). Rather i believe in credit discipline and good credit practices to improve CIBIL score. I do agree that for an asset like property, an individual cannot be save such a huge amount to buy property without home loan. Barring few exceptions i.e. high value assets, we can manage our finances to avoid low value loan / borrowing. In my opinion, a Loan should be availed if following 2 conditions are fulfilled (a) Purchase / Buy ... Read More