Why it makes sense to insure a loan

Almost every other adult in India has some form of debt or the other. Some of us might have taken a personal loan to fund a wedding, someone might’ve taken a home loan to construct his/her dream house, someone might’ve taken an education loan to study abroad. Whatever the reason might be, loans are extremely popular in the country, with certain organisations and individuals having debt to the tune of thousands of crores.

While we might not be under thousands of crores of debt, there would be a possibility that the loan amount is high, based on the individual’s income. Now, we know what happens to the ‘common’ people who default on loans. Lenders send agents to recover the amount, often seizing the collateral in case of secured loans. If we are unable to pay even after this, they could go after our loved ones, turning our entire world upside down.

Image Credit: economictimes.indiatimes.com

What is loan insurance?
Loan insurance or loan protection insurance, as the name implies, is an insurance cover which is taken for the loan. This can be understood by a simple example.

Say Mr. Jacob took a home loan of Rs.50 lakh, using this money to build a house. Given the loan quantum, he chooses to purchase a loan insurance. This loan insurance is taken for the loan amount, i.e. Rs.50 lakh, protecting him and his family from any liability which arises out of his inability to repay the loan. It is defined as an insurance which pays off any outstanding loan amounts under certain circumstances.

Why should you insure your loan?
Life is unpredictable, there are no two ways about it. Given this unpredictability, can we change the future of our loved ones on the basis of something taken by us? If anything were to happen to us, the lenders wouldn’t forget the money they lent. This sum would still need to be repaid, with the onus of repayment often falling on our family.

Now, this can take a toll on the family, especially if the sole breadwinner was the one who took the loan. His/her passing away would not only impact the family’s ability to continue with their normal way of life, it would also burden them additionally. As such, we wouldn’t want to put them through this, making loan insurance a good option in certain cases.

Alternately, there could be instances where the borrower loses his/her job. This can impact the payment of EMIs. Under normal circumstances the lender would attach the collateral and try to recover the amount borrowed. In cases where the money was borrowed without collateral, the borrower might be subjected to immense trauma. A loan insurance plan provides protection under such circumstances. The insurer will handle the EMI repayment for a specific number of months, providing the borrower sufficient time to find another job.

The third instance where a loan insurance comes in handy is when the borrower meets with an accident/is diagnosed with an illness. The insurance policy will typically cover a number of diseases, based on the cover chosen. Alternately, if the borrower met with an accident which resulted in total and permanent disability, the policy would provide compensation which would take care of the outstanding loan amount.

Should you insure all loans?
The answer to this question goes beyond a simple Yes or No. Insurance for loan depends on factors such as the loan amount, the loan tenure, the financial standing of the borrower, etc. In case of loans involving a high quantum, say a home loan or an education loan, it makes sense to insure the loan.

Image Credit: dierenmeldpunt.com

Alternately, if the loan amount is not extremely high, say in the case of a personal loan, one can choose not to insure it. It is imperative that one consider the cost of insuring the loan, for a certain premium needs to be paid for it. This premium depends on the age of the borrower, loan tenure, and the loan amount.

If one feels that the chances of anything happening during the loan repayment tenure are high, he/she should go in for an insurance cover. A number of general insurance companies currently offer this in India.

While a life insurance policy is a must in today’s world, most of us choose to ignore the other options provided by insurers. Only recently has the concept of health insurance picked up in the country.

Another concept which could truly benefit us is loan insurance, ensuring that we leave behind no liabilities for our loved ones.

This story first published on: sify.com

‘Life’ Insurance or ‘Death’ Insurance?

Term insurance is a pure risk-cover policy and is the most cost-effective financial instrument available to hedge against the risk of untimely death.

Image Credit: Forbes

It is widely believed that life insurance, especially pure term insurance, is all about death. Also, that you buy term cover because you are scared of death. There is an almost morbid aura that surrounds this theme!

Yes, that is one perspective to have. However, you can also flip the argument around if you were to consider the only real benefit that pure term insurance provides. It is a sum of money that is assured to be paid to the nominee/s, who now have to manage a living with no financial support from the life that was assured. It gives the family much needed financial succor to get on with life even when disaster strikes in the form of an untimely death of the breadwinner. It gives life a chance. That’s how ‘life’ insurance got its name.

And again, when one buys life insurance, is it because one is fearful of death or is it to make you fearless of the ultimate uncertainty in life? Perhaps, a hedge against a redictably uncertain life.

Though nothing can replace the loss of a loved one, financial support in the form of life insurance can help the family tide over this irreversible setback. It provides a hedge to the family in the face of disaster, that can otherwise lead to not just compromising on lifestyle but possibly even having to give up on bare necessities.

Term Insurance provides the most efficient financial cover

Term insurance is a pure risk-cover policy and is the most cost-effective financial instrument available to hedge against the risk of untimely death. Such a policy offers a lump sum payout in case of dear of the insured within the tenure of the policy and in some cases lump sum payout with monthly income for a pre-specified period. It helps settle one’s financial liabilities like loans, children's education and loss of income.

Large cover at low premiums

A large cover at low premiums is definitely on our radar while purchasing life insurance. Term insurance provides exactly that. For example, a 30-year-old non-smoking male can opt for a cover of Rs 1 CR for a period of 40 years by paying a premium of a little over Rs 10,000 annually, which works out to around Rs 30 per day.

The premium amount payable for the entire policy tenure (40 years in the above example) goes down when the policy is purchased early. The same cover for a similar period purchased at the age of 25 requires a premium of a little over Rs 7,000 annually. The amount of cover required would depend on the family’s lifestyle, current liabilities and present/ future expenses.

Image Credit: stgeorgeutah.com

Manage your liabilities

It is common to take on liabilities during our working lives. Most people opt for a home, car, and even education loans that are usually paid over a period of time. When the principal breadwinner is no more, the dependents need to shoulder the burden of these liabilities. This can become a mammoth task in the hour of distress.

A term policy with adequate cover arms the dependents to manage these liabilities with ease. The payout received from the insurance company can be used to pay off EMIs or even the principal amount of the loan(s) taken.

Monthly income benefit

Loss of the chief breadwinner results in the absence of regular income to the family, which can derail the finances and affect the lifestyle of one’s dependents. In the hour of distress, it may be difficult to gauge the investment options to utilize the large payout from a term policy.

A steady monthly income in this hour is crucial to meet day-to-day expenses. Thankfully, there are term plans that offer monthly income benefits along with a lump sum payout. There are policies that offer monthly income which increases by 10% every year (for a period of 10 years) in addition to the lump sum payout.

Financial pundits would say that the breadwinner of a family has an economic value that needs to be replaced in case of a premature death. The younger the family member, greater is the burden of financial replacement because of the number of earning years lost and subsequently the time to create a corpus. Secondly, the aggrieved family has a much longer period to fend for without the chief earning member. So, the thumb rule of income multiple for life cover calculation is not applicable in case of a young, untimely death.

Hence, it's prudent to find out the lifetime value of the principal earner and buy a term plan that can adequately substitute his/her financial value.

Addition of cost-effective riders

Riders help in customization of a policy. These offer additional benefits that strengthen a term plan. Critical illness, waiver of premium, accidental death and dismemberment are few popular riders that can be attached to a term plan.

Each rider has its own unique benefit. However, just as purchasing a policy requires in-depth analysis, adding a rider to a policy requires comprehensive study and research. The options are varied, and policyholders must make a smart move by understanding the benefits of each of the rider. A rider can be attached or dropped during the policy, subject to conditions.

Image Credit: mikeiamele.com

Option to increase your cover at important milestones of life

An important lesson of financial literacy is to review one’s life cover requirement periodically. There are term insurance policies available in the market which provide the flexibility to increase the sum assured in future, at important milestones in life like marriage, childbirth, etc. without even getting into a fresh medical check-up. Essentially, you are guaranteeing your option to increase your cover, irrespective of your health condition in future. After buying such an option, you need to intimate your insurance company about milestone events along with the requisite proofs. A careful need analysis at the time of life stage change helps in determining the coverage required at each stage of life.

Protection is foremost

It is well known that as Indians, family comes first for us, especially when it comes to financial savings and protection. Take a moment to imagine their life without you and you might get your answer. Get rid of this fear and become fearless by buying a term plan of your choice. The range and options of term plans available have never been as good as they are today. 

This article originally published on: indiainfoline.com

Want to invest in Equity Mutual Funds; here’s what you should know

Many of us are often scared to invest our savings in equity-related market, mainly because we are not aware of its working.

Confusion in such investment schemes is very natural as we fear that equity-related market is very volatile, uncertain and also guarantees no return.

Therefore, we often end up choosing investment modes like fixed deposits, savings account or any other small savings scheme.

Equity funds are those who gives you advantage of entering into stock markets, and your risk related to these funds are managed by expertise.

Here, you will come to know in detail about the advantages of investing in equity especially in mutual funds.

Equity Mutual Funds

Mutual funds are at booming stage in India currently and it comes in many category and one such is equity mutual funds.

As the name suggests, equity mutual funds are made in stock market, under which you buy shares of a companies in large quantities with prime object to earn higher returns.

There are several types of equity mutual funds like diversified equity funds (having more than one particular stocks), sector and thematic funds (like FMCG, auto, etc), large cap (well established firms), mid-cap and small-cap (smaller companies with turnover between Rs 20 crore – Rs 500 crore) and index funds (like all 30 Sensex companies).

According to Motilal Oswal, there are five advantages of investing in Equity MF.

1. Professional Management

Even though you pay for everything, your portfolio is managed by expert professionals whose main motive to manage your investment and safeguard your returns.

Asset Management Companies (AMCs) appoint experienced and expert professionals to invest your money in equity. Fund managers spend quality time learning about the past and researching about the future performance of companies they invest your money in.

2. Portfolio Diversification

Investments of as small as Rs 500 in this mutual fund scheme gives you the privilege to make a diversified portfolio. Portfolio diversification helps to reduce risk which means you are less likely to lose money on your investments. Compared to direct investments in stocks, equity mutual fund schemes are affordable yet diversified models of investing.

3. Liquidity

These are mostly liquid based schemes, as they offer you an opportunity to redeem your investment at any time or at a net asset value (NAV) higher than NAV at the time of purchase.

However, this is not applicable in equity linked savings schemes where lock in period of 3 years has to maintained by an investor.

You can even invest more in equity mutual fund schemes during the market fall to buy units at lower NAV. Such liberty of investing and redeeming gives you better control over your investments.

4. Systematic/ Regular investments

This scheme does not require a heavy amount of investment, it gives you opportunity to start your account at a small sum which can be paid at regular intervals via Systematic Investment Plan (SIP).

The small sums that you invest regularly are invested to buy stocks. This also develops a regular habit of investing which is useful in long term wealth creation.

5. Tax benefits

Usually it is advised to hold an equity mutual fund scheme for a period of one year, as the capital gain on your investment gets exempted from tax liabilities. Look at the brighter side , you create enough wealth in equity MF for one year and do not have to pay for taxes.

Apart from this, the Indian government also gives tax rebate for equity linked savings schemes (ELSS) under section 80C of Income Tax Act 1961. One can invest into ELSS and deduct upto Rs 1,50,000 from your taxable income to effectively reduce your tax liability.

So why not start creating SIP in equity funds.

An SIP is usually a monthly investment that happens automatically on a pre-decided date. There are many firms which offer you SIP on equity funds, you just have to open an account with them and they will take care of your investment.

By giving a mandate to the fund company for deducting your investment amount from your bank account, SIP gets average out from your cost of investment.

When SIP gets average out from your bank account, then takes place the allotment of shares in the equity funds.

Generally, when the markets are high you get allotted with fewer units, and when they are low you receive more units in your portfolio with the same amount.

One big advantage of carrying out a SIP in equity funds, makes investing become a habit. SIPs are automated investments that ensure you save the designated amount every month.

This way you can invest before you spend, as the SIP date is in the beginning of the month for most of investors.

This article first published on zeebiz.com
Written:
By Pooja Jaiswar
Updated: Fri, Dec 08, 2017
09:01 pm
Mumbai, ZeeBiz WebDesk

Mutual fund units cannot be transferred till the death of the unit holder

If a child is set up as a nominee in the mutual fund folios of the father, then upon his death, the child can stake claim to the units and get them transferred to her name

I am 31 years old, investing Rs10,500 via SIPs since last 6-7 months in—Large-cap: Birla Sun Life Frontline Equity Fund (G) (Rs4,000); Multi-cap: ICICI Prudential Value Discovery Fund (G) (Rs5,000); and Small-cap: Reliance Small Cap G Fund (Rs1,500). I want to invest for minimum 5-7 years. I want to know if my portfolio is good enough? Some people are suggesting that I add a mid-cap fund for better returns. My aim is to create wealth but at the same time, I don’t want to take too many risks. In the long run, should I top up these existing funds as and when possible?

Nikhil Malhotra 

There are a few things you need to consider before you decide on your fund selection. One, you need to have a goal (in the form of a target amount) for your investments. Next, given that you have a time-frame in mind, you need to check what the possibilities are of you reaching your goal with commensurate risk. Will having an all equity portfolio help you do this without much risk, is a question you need to ask yourself. Past data suggests that an all equity portfolio has a measurable chance of delivering negative returns even over 5-year timeframes. This is so even if you go with SIPs. Given this risk, it is better that you do an asset allocation for your portfolio, with a mix of equity and debt funds. How much equity you should have will depend on your risk profile. However, given your age and timeframe, a 70:30 equity debt allocation will do a good job of hedging your portfolio from risks. If you think this allocation suits you, then you would need some equity and debt funds. A balanced fund will give you some debt but given that the debt allocation there is low, even a 40% allocation to a balanced fund will give you a 10% allocation to debt. Hence, given your present amount, this may not be an ideal allocation.

Among the funds you hold, you can consider stopping investments in Reliance Small Cap and just hold the fund. Since you have stated that you do not want undue risks, you can do away with the risky small-cap category. Instead allocate it to a debt fund like UTI Short Term Income fund. Invest Rs3,000 in this fund and cut back on the ICICI Pru Value Disocvery by Rs1,500 to ensure you have sufficient debt allocation. Your Aditya Birla Frontline Equity fund is a good choice. You can continue it. The two equity funds and one debt fund should provide you a good mix. In future, if you plan to increase investments, you can consider adding a balanced fund.

Kindly assist me with the information that I would need to get started with investing in mutual funds. My friend says that it is better to buy directly from the fund website rather than going through an agent. I would save 1% of the brokerage. What are some good funds I can invest in, also keeping into account tax benefits, if any? I have around Rs20,000 to invest in a month. 

Joseph Falcao

For successful mutual fund investing, an investor needs to be able to do three things. One, be familiar with financial arithmetic and be able to do some basic planning. This is to figure out how much to invest and how long to invest for to reach defined financial goals in life. Second, the investor would need to understand asset allocation principles and be able to put together a good portfolio. While this is not rocket science, especially given that there are tools such as Mint50 funds available, it still requires an understanding of portfolio design. Third, and as important as the first two, one would need to be able to maintain this investment portfolio both from a review and rebalancing perspective as well as from a behavioural perspective. If an investor can do these three things then they should unhesitatingly go to mutual fund websites and invest directly. 

However, as I read your question, I can see that you are quite a distance from being able to build and maintain your own portfolio. Given this, I would recommend that you go through an adviser. If you can find a registered investment adviser (RIA) who can take a fee and guide you with direct funds, please go with such a person. Else, please seek an adviser who’ll use regular plans for your portfolio.

If a person is holding a few mutual funds in his HDFC ISA account for, say, 30 years, and is too old to track them, can he transfer them to his grown up son without selling them so that the son can benefit from the long-term compounding and also continue to hold them even longer? If not, upon death of father, can it be transferred and can the son still hold the units for long term?

Rajendra

Mutual fund units cannot be transferred to another person other than in the situation where the unit holder is no more. If the son is set up as the nominee in the folios of the father, then upon the death of the unit holder, the son can stake claim to the units and get them transferred to his name. However, this does not happen automatically and would require the son to be aware of these folios. So, it would be best if the father either creates a Will or lets the son know about these investments pro-actively. When the time comes, the son would need to approach the mutual fund companies where the folios are and produce a death certificate apart from regular KYC formalities and documents identifying himself (like PAN or Aadhaar card). When these are presented, the units will be transferred to a new folio in the son’s name. There would be no need to sell and re-invest these holdings in this situation, and the son can continue to benefit as a holder of the folio. 

Source: livemint

Which schemes should I invest for 25 years?

I am a beginner and want to invest Rs 15,000 per month in mutual funds. I am a moderate risk-taker. Please suggest some good funds to invest. I am 31 years old and my monthly income is Rs 75,000. I will invest for 25 years. 

--Rajiv Ranjan 

If you are not familiar with mutual fund and investing concepts, it would be a better idea to consult a mutual fund advisor or a financial planner before investing.

Here are our recommended equity mutual fund SIP portfolios: Best mutual funds to invest in 2017 . Choose a portfolio that is in line with your risk profile and SIP amount.

Though you are investing with a long-term horizon of 25 years, do keep track of the performance of your portfolio. Visit ET.com Mutual Funds in the first week of every month to check whether there is any change in the portfolio.

Source: economictimes.indiatimes.com
Read More about Mutual Fund: http://bit.ly/2jpvssa

Should You Take a Personal Loan to Buy a Car?

Buying a car is a dream most of us harbour, with banks more than happy to assist us in fulfilling this dream. With car manufacturers offering models for every budget, owning a car today is easier than it ever was. It is perhaps this ease of owning a vehicle which has seen the number of vehicles on Indian roads increase to over 200 crore. Thousands of new cars and bikes are added to our streets on a daily basis, with most of these taken on loan.

Image Credit: inadaydevelopment.com

If you are one of the many people looking to purchase a car through a loan, there might be cases wherein you asked yourself – Should I take a car loan or personal loan to buy the car?

Well, to be truly able to answer this question we need to understand the nuances of both loans which can have an overall impact on one’s finances.

Listed below are the five main distinguishing points between a personal loan and a car loan.

1. Ease of sanction – Imagine running from one bank to another to get a loan. This sounds exhausting, doesn’t it? In terms of ease of getting a loan, a car loan is quicker and easier to get when compared to a personal loan. Most banks require a lot of documentation to process a personal loan, with it often taking a long time for it to be sanctioned. On the other hand, most car showrooms have partnerships with banks/finance companies through which one can get the loan sanctioned in no time. This can be easily observed when one walks into a car showroom. This feature goes in favour of the car loan, making it a simpler option.

2. Interest rate – A loan isn’t a gift which is given by banks, it a sum which needs to be repaid, with interest. This interest component varies based on the product on offer. Typically, most banks offer personal loans at a higher rate of interest when compared to car or vehicle loans. While a motor vehicle loan can be availed at rates ranging between 9% and 14% per annum, most personal loans attract an interest in the range of 12% to 20%.

In cases where one is looking to buy a used car, the interest for a used car loan is higher than the interest for a regular loan. Used car loans can have an interest ranging between 14% and 20%, based on the bank.

Note: The interest rate can change from bank to bank and the values mentioned above are an estimate.

3. Tenure – The loan amount taken needs to be repaid over a certain period of time. Most banks offer a repayment period upto 5 years for personal loans, with this being around 8 years for a car loan. The repayment period for a used car loan is typically lower, with banks capping it based on the age of the vehicle.

4. Quantum of loan – With cars priced across different brackets, it is not hard to find a car within a set budget. In case of car loans, most banks are willing to finance anywhere between 50% and 80% of the car cost, with this going upto 100% in certain cases. In case 100% financing isn’t available, a car loan will not be sufficient to purchase the car. This implies that one needs to spend some amount from his/her own pocket. For example, for a car costing Rs.10 lakh, a bank offers 80% financing, or Rs.8 lakh. The remaining Rs.2 lakh needs to be arranged by the individual, which could be a hassle in certain cases.

On the other hand, one can directly approach a bank for a loan of Rs.10 lakh and use this to buy the car. There is no need to pay any amount from one’s own pocket.

5. Collateral – A personal loan is an unsecured loan, meaning that it can be availed without providing any security/collateral. On the other hand, a car loan is a secured loan, which means that the car is the security for the loan. In case one fails to repay this loan, the bank can take possession of the car and sell it to recover their money.

While these five points highlight the basic features of a car loan and a personal loan, the ultimate decision of which loan should be taken boils down to the individual. If one has the down-payment amount and wishes to pay a lower rate of interest then he/she should choose a car loan directly. One can also choose a car loan if he/she has a poor credit score, for getting a car loan sanctioned is far easier than getting a personal loan sanctioned.

On the other hand, an individual who does not have the required sum for down-payment and is OK with paying a tad higher interest can go in for a personal loan. In that case, first, it’s important to check personal loan eligibility criteria and then apply for the loan. Also, if the buyer is purchasing a used vehicle, it makes more sense to go in for a personal loan compared to a used car loan.

This article originally published on news18.com

Not able to pay back loan, What can be done?

If we are not able to pay back loan, What can be done? Will it result in dooms day striking our peaceful life? Will the defaulter go to jail straight away? Else we will have hooliganism displayed at our front doors by Banks? Perhaps defaulting loan payment is one of the biggest fear for a common man. These days middle class is earning handsomely.

With increase in purchasing power of middle class they are opting for bank loans more frequently. Sometimes people resort to too much loan without analyzing their payback power.

In past few years the numbers of people defaulting loan payment has risen gradually. This brings us back to our question that what happens if one is not able to pay back loan.

It is a fact that must first be accepted by the defaulter that loan payment default is not a acceptable practice. Loan defaulter are not liked by banks. So for sure defaulters shall not accept a very polite knock on the door by banks.

But there are rights of defaulter that one shall know. Banks cannot simple send recovery agent at their doors to shake them up and show disrespect. In this article we will see what are the rights of loan defaulters.

RBI acting as Big Boss:

Some years back there were lot of news printed about recovery agents. Today we visualize recovery agents more as a rowdy person than a bank associate. In one of the publications of Reserve Bank of India (RBI) it was mentioned that ‘engagement of recovery agents is causing serious reputation risk for the banking sector as a whole’.

Taking a corrective action, RBI revised the guidelines for engaging recovery agent by banks. There is a clear cut guidelines from RBI that banks/recovery agents cannot use ‘uncivilized, unlawful and questionable behaviour’ in the process of loan recovery.

Banks must hire recovery agents with care

RBI has asked banks to conduct due diligence on the agency before nominating a recovery agent. Due diligence shall be conducted by banks. Due diligence shall not only look at the company as a whole but shall also look at who are involved in the recovery process. The person hired as recovery agents shall pass through police verification. The family background of person in consideration shall also be checked by the agency before hiring. So it means that if a rowdy (in name of recovery agent) brushes his shoulders with the defaulter, he/she can lodge a complaint in police station. In this case the recovery agency must give clarification why a rowdy was hired in first place. This may also result in loss of contract by recovery agency from bank.

Recovery agency cannot simple come knocking at door of defaulter

Before bank sends a recovery agent they must issue a intimation. In the intimation letter they must first authorize a recovery agency to act on their behalf. Communication of authorization shall go to the loan defaulter directly from the bank. So it means that any xyz cannot knocks on the door of the defaulter acting as recovery agent. If somebody does the opposite, the load defaulter can refuse to entertain the agents. It may also happen that the recovery agent self carries the authorization letter. But this can be done only when several attempts to deliver the letter has failed in the past. Recovery agents shall approach the loan defaulter only after showing the authorization letter and identify card. In case the agents misbehave, the details of identity card can be used to lodge a police complaint. For helping the cross-verification of the credentials of the recovery agent, concerned bank shall publish the details of recovery agency on their website.

Banks must hear the defaulters side of story

While issuing the details of recovery agent by the bank, they shall also issue one more communication. This communication shall furnish details of ‘how and to whom’ the loan defaulter can contact in bank explaining his grievances. This step looks simple, but it will work as a big help when a recovery agent knocks on defaulters door steps. Then the loan defaulter can show a copy of discussion he/she already had with the bank. If the defaulter has already explained his grievances directly to the bank then recovery agent has no further role to play.

Responsibility of Bank towards Recovery Agents

Frankly speaking, it is banks job to undertake loan recovery process in case of default. But RBI allowed banks to offload the recovery process to a third party. But there are risks when a banking activity is offloaded to a third party. In order to manage the risks, RBI asked banks to provide training to new recovery agents. All recovery agent shall first get a certification and only then they can act as recovery agents. The training session shall explain the ‘code of conduct’ & protocol that recovery agents shall practice while dealing with loan defaulter.

After what steps Banks/Agents can claim possession of asset/s?

If one has defaulted in payment of EMI of his/her auto loan, the recovery agent cannot simply take possession of the vehicle. Bank must issue a letter highlighting the notice period before taking the possession. The letter must also clearly state that what loan defaulter must do in order to get waiver of the notice period. Recovery agent cannot claim possession of anything. They can claim possession of only those items which has been identified as ‘security’ in the loan application form. Bank shall also give in written a ‘final chance’ to the loan defaulter to clear his dues. Repercussion of non clearance of dues must be highlighted to the loan defaulter in written. Banks can only take possession of security and auction it to recover the bad debt.

Banks can show sympathy to defaulters?

It is possible for defaulter to get sympathetic consideration from Bank? RBI has made it compulsory for all banks to have a credit counselor. The loan defaulter can approach the credit counselor and explain his/her grievance to them. In case the counselor is convinced, a recommendation can be sent by him to the bank. He can propose the bank to consider sympathy for the defaulter.

Top Home Loan Schemes: This Festive Season

Courtesy: thehindu.com

Buying a house is the cherished dream for every individual and most rely on their trusted banker to help out with procedures and paperwork. But are you aware of the options available with other banks and non-banking financial organisations?

Most home buyers that opt for home loans get carried away by convincing sales talk and forget to ask relevant questions about charges, late payment penalties, flexible interest rates etc., and then end up paying more than double of the amount borrowed.

So, how do you choose the best home loan plan that suits your financial commitments even if there is a large unforeseen expense in the future?

It is advisable to carry out a thorough check of all lenders in key areas like:

Interest rate
Processing fees
Loan approval time period
Penalties and charges for late payments
Flexible loan regulations and nil foreclosure charges

Remember that if interest rates are low, the fee structure is likely to be high though long duration loans come with low interest rates.

Due to the festival season, both banks and financial institutions are offering attractive freebies to customers. Here are some of the top home loan schemes that have reasonable interest rates, limited charges, and several other benefits.

State Bank of India Home Loan

With a market share of nearly 42%, State Bank of India is the current top favourite of home loan applicants.

Rate of interest: Between 8.35 to 8.70%　

Festive offer: Zero processing fees valid till Dec 2017 for all new loans. This could help to save around Rs.10000 to Rs.12000 depending on the loan amount applied for and the duration.

HDFC Home Loan

Aggressive marketing and flexible home loan plans tailored to suit borrowers has helped HDFC bank capture 24% of the market to become the second largest home loan disbursing organization. 　

Rate of interest: Between 8.35% to 8.55% and their processing fee is 0.5% of loan amount or Rs. 10,000 + service tax.

LIC Housing

LIC Housing has a wide network of branches and promises hassle-free documentation to make it easier for customers to get faster loan approvals. 　

Rate of interest: Between 8.35% to 8.60%

ICICI Bank – Being a private bank, its home loan processing is faster than public banks. This bank is part of the Indian’s government’s Pradhan Mantri Awas Yojna to enable low cost housing for the salaried class. So, depending on a customer’s payment track record, it also offers overdraft facility to them for personal emergencies.

Rateofinterest: Between 8.35 to 8.80%.

Axis Bank – Though a relatively new entrant into the market, Axis Bank has managed to create a strong reputation for itself through aggressive marketing and loan disbursal policy.

Rateof interest: Between 8.35 to 8.70%.　

New: The bank’s new home loan scheme offers a waiver of 12 equated monthly instalments for customers that pay regularly during the fourth, eighth and twelfth year of loan disbursal. This loan waiver will help in cutting down the tenure of home loan. 　　　　

This article is contributed by RoofandFloor, part of KSL Digital Ventures Pvt. Ltd., from The Hindu Group

Source: thehindu.com

Finheal announces the opening of new branch Sec-14 Gurugram, Haryana

We are excited to announce the opening of our (Finheal) New Branch at Shop 10, H.No. 2267/3, 2nd Floor, New Plaza Market, and Opp.: ICICI Bank, Sec-14 Gurugram, Haryana.

The New Branch will be able to serve better the needs of our valued clients on the Gurugram side of Haryana.

We will be producing the same high quality financial service in quicker times with reduced freight costs.

Finheal.com is one-stop solution for all your financial needs. Our online portal offers instant application of loan and Investment products. We provide loans for salaried individuals, self-employed professional and self-employed Businessman. Our Investment advisory includes advising need based investment products. Finheal is managed by Professionals and has a strong experienced/skilled team to provide state of the art services to the customers.

Finheal "The loan provider" deals with personal loan, home loan, car loan, Business loan, Mortgage loan, LAP/LRD, Project finance loan. We have tie up with major of the Banks/NBFC to cater your needs. Finheal is committed to make the entire process smooth and hassle free for customers starting from advising the right product, helping in completion of documentation till disbursement of the loan.

Finheal "The Investment advisor" always focuses on need based investment products for its customers. 

Our vision is to replace the product centric approach by need based approach. Our trained and skilled team is eager to cater your investment needs.

Know more about “Finheal” click here: finheal.com

Call Us:+91-9310-655-500

 E-mail: info@finheal.com

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