4 reasons why your loan application can be rejected?

A loan is a great way to fulfill any financial requirements or assist in financial expenditures. In addition to this, you can opt for loans that will suit your need to perfection, for example, a car loan to purchase a car, or a business loan to finance one’s business. However, as a part of the loan application process, you will need to satisfy certain loan criteria. These criteria may differ from the type of loan you may need to apply for. While you can always use the loan calculator to check your loan eligibility and avoid the possibility of loan rejections, here are some factors you can consider when applying for the loan.

• Joint loan with your sister or friends:
As a part of the loan application process, another individual may apply for a joint application. However, certain banks have restrictions when it comes to fulfilling the criteria for the joint loan application. For one, there is a restriction when it comes to sisters applying for a co – applicant. Alternatively, banks do not provide a co – applicant status to friends of the applicant. However, you can choose to opt for a loan with your parents as co – applicants.

• Your loan application has been rejected before
It is not a wise move to keep applying for a loan impulsively and without proper rationalization. If your loan application gets rejected, it will be recorded in your CIBIL record. Therefore, you must weigh the pros and cons before applying for loans anywhere. With every loan application you make, wait for a feedback or an offer before applying for a loan in a different institute. This will give you a chance to rectify any error or even update your credit score before you apply for you next loan application

• You are a compulsive job hopper:
Banks place a lot of importance on job stability when it comes to applying for a loan. Certain banks even insist that an applicant should be employed with their workplace for a certain tenure before they are eligible for any loan. However, this tenure can change depending on the institute and loan type you are applying for. Additionally, if your company’s future indicates that it is not financially stable, the bank you are applying for a loan, has a right to reject your applicant.

• You had to pay when you were a loan guarantor
When you stand as a loan guarantor for other loan applicants, you have to stand responsible in the event that the individual does not repay the borrowed funds. When this occurs, you will be responsible enough to repay back the funds. This in turn, will affect your CIBIL score, and consequently your future loan applications.

Are you aware of these personal loan EMI calculator benefits?

There will come a time in your life, where you will be required to make a large expenditure wherein your current income may not suffice. At such a stage, you can opt for the personal loan. Amongst all the different loans available, the personal loan comes with no add on frivolousness while providing the right monetary stimulus to your requirement.

But applying for the loan alone will not satisfy your financial requirement. You will also need to ensure that you can repay the borrowed funds. Additionally, you will also need to take into consideration the interest rates and the processing fees which will be added to the overall loan amount. This overall amount needs to be repaid on a monthly basis, through EMI’s. But how can you ensure that the EMI amount will match your income will balance your other debts? Through the personal loan EMI calculator, you can calculator the EMI amount that is most applicable to you. Here are some of the other benefits of the personal loan EMI calculator you can take advantage of:

Amortization table at the end of the calculation:

When it comes to calculating the personal loan amount you need to repay back, plenty of factors will be taken into consideration. For one, the principal amount is taken into consideration. At the same time, the various additional fees will also be added to the loan amount. Finally, the interest rate is also calculated on the overall loan amount that is taken, along with the tenure of the repayment. Once this whole amount is calculated, it is further divided into various EMI’s which will be required to repaid on a month on month basis, until the tenure is met. Overall, this may seem like a tedious job to calculate, especially manually. However, the personal loan EMI calculator will make this calculation into a quick and convenient process. At the same time, the resulting calculation will be formulated in an amortization table, which will provide your EMI’s in a detailed breakup.

Help compare loan products

Every individual will have different financial requirements. Keeping this in mind, plenty of banks and financial institutes offer competitive rates, with a promise to satisfy your financial requirements. However, to ensure that these offerings match your requirements, you can use the personal loan EMI calculator, to calculate the amount taking into consideration the offering of each of these banks. This will provide you with relevant details and information that you can use to compare each offering to know which the best personal loan offer is.

Provides you with sufficient resources to negotiate terms

Most banks will provide you with personal loan offerings with different rates. These offering may not satisfy your requirements. But by using the personal loan EMI calculator, you can calculate different results which, you can use as leverage to negotiate the final loan amount.

Apart from these factors, there are plenty more benefits of the EMI loan calculator which you can take advantage of. However, in the end, you must ensure that you consider all the loan factors before applying for the final loan.

How to manage your credit utilization ratio on your credit card?

Amongst the several banking cards that are available, the credit card is one of the most popular choices. However, when applying for a credit card, there are certain factors you may need to take into consideration. No doubt, you will consider the interest rates and the benefits that come with this card. However, you will also need to consider the credit utilization ratio.

Credit utilization is the ratio, between your credit card expenditures and the sanctioned limit for the card. This canbe calculated for your individual card or cumulative cards. The overall spending on your card as compared to the total sanctioned limited on all your cards it eh cumulative credit utilization. This ratio is important as it can affect your CIBIL score.
A high ratio indicated that you are credit hungry while managing a poor debt. This indicated a risky behavior when it comes to borrowing. A nil ratio does not reveal important details about your expenditures, which in turn can affect your CIBIL score. Given below are the steps you can take to maintain this ratio:

Reduce your expenditure:

This is one of the simplest ways to maintain your ratio. However, it may not be the easiest step to take. Review your history and check to see if you can reduce any unnecessary or impulsive expenditures. At the same time, you will need to avoid making these same expenditures in the near future.

Opt for a higher credit limit:

Opting for a higher credit limit can decrease the spending factor or increase the credit limit factor. Amongst both options, opting for the bigger limit will be more beneficial. In order to increase your limit, you can review your credit card issuance. Most banks offer to increase the credit limit after a certain expenditure tenure or usage. You can always check with the card company to find out if you are eligible for this increase. 

Apply for an additional credit card:

If you cannot raise the credit limit on your card, you can always apply for an additional card. This card will raise your overall available credit limit.This will make it easier for you to control a high credit utilization ratio. However, you must ensure that your expenditure is spread smartly over all the available cards you have, while ensuring that the dues are paid off.

Distribute your expenditures between all cards:

As mentioned previously, you can always apply for an additional credit card in order to increase the overall available credit limit. However, you can always take your current credit cards into consideration, and review each card’s expenditure separately. Ensure that the consecutive expenditures are distributed judiciously over all cards. Additionally, ensure that your expenditures are synchronized with your billing cycle and due dates.

When should you say a ‘yes’ to a persona loan?

Earning an income is a great way to manage your expenses and save your finances for the future. However, at some point in your life, you will fall short of funds, which will require you to seek an alternate source to gain the required finance that will fulfill the requirement. Amongst the different options that are available, the personal loan has been a viable one. Given below are the various reasons why you should say a yes to this loan in such a situation.

No collateral required

Most loans are divided into two categories, namely the secured and unsecured loan. In the secured loan, you would need to provide an asset of an equal or a substantial amount in comparison to the loan amount. In other words, you will be required to provide collateral.However, in an unsecured loan, you need not provide any collateral. This makes it easier to apply for a loan, without any hassle of getting the appropriate asset for security. Therefore, if you do not have any assets of relevant value and require funds, you can always opt for this loan for financial assistance.

Short processing time

As a part of the loan application process, you will be required to submit a certain set of documents pertaining to the loan you are applying for. For example, when applying for a business loan, you will need to provide the income tax returns, abusiness plan for the future and a document validating the reason for the loan and its usage towards the business. This is no different for the personal loan. However, unlike other loans, the persona loan requires minimum documentation, namely pertaining to your identity profile and income report. Such documents take a few hours or days to be verified and processed, thus reducing the overall processing time of a loan as compared to other loans. In the event you are looking for quick finances, the personal loan makes an exceptional option.

Repayment affordability

Every individual possesses different financial habits and different expenditures. This can lead to different financial requirements, especially when it comes to large expenditures. At this stage, you can opt for a personal loan amount that will fulfill your financial requirements. However, at the same time, you need to ensure that you can afford the loan. Keeping this in mind, banks and financial institutes set eligibility criteria which need to be satisfied before your loan application can be processed. In the process of verifying your loan application, your income, current debt to come ration and your credit score will be taken into consideration.

Apart from these reasons, there are plenty more you can refer to. In the end, however, the decision to apply for the loan and to repay it is your responsibility. Personal loans must only be used as a last resort to meet an unavoidable expense, as taking on any debt is a financial decision that can last a lifetime.

Steps to take when converting a resident account to an NRO account

As an NRI, you will not be able to hold any residential bank accounts or have the authority to use the functions of them. At the same time, these accounts will be converted into an NRI account, which will provide you with the financial assistance and function you require when settled abroad. This account will either be converted into the NRE or NRO account.

The NRO account can be opened with funds which are either remitted from abroad or even generated in India. Like the local savings account, these accounts will have certain restrictions on repatriations of the proceeds to the country you are residing in. Here are the steps you will need to take when converting your account to the NRO account.

Step 1: Submission of form

Plenty of banks provide a specific form when there is a requirement to convert an existing saving account to an NRO account. These forms can be requested from the bank. Alternatively, you can also apply for the conversion process online and download the form from the bank website. A single form can normally be used to convert all your saving accounts opened in a single bank, against the same customer ID.

Step 2: Provision of documents

While converting a regular account to an NRO account, in a way, you are opening a new account. Therefore, you will also need to provide a filled form for a new account opening, in order to support this conversion request. In addition to this, the address proof of the overseas address must also be provided. You will need to submit copies of your passport, valid visa or even your work permit. You also need to submit your OCI/PIO card.

Step 3: Providing the right funding
The requirement for the resident saving account and the NRO account is different. For one, the account in question must have a minimum balance of 7500 Rs. Before being converted to the NRO account. If there is the insufficient amount, the necessary steps must be taken.

Step 4: Submission of documents
The documents must be submitted to the required bank branch. In the event you have already traveled outside, the form and the documents must be attested by the Indian embassy. It must be then sent to the branch.

Step 5: Change of account status

Once the required forms and documents have been received by the bank and verified, the status of the account will change. It will be re – designated from a residential savings account to the required NRO account. This re – designation may not change the account number, but it may be flagged off as an NRO account amongst the bank records.

How to open a NRI account from abroad

As a NRI whose settled abroad, has the opportunity to invest in various options back home. However, before investing in any of these options, the NRI must first open a NRI account. In this case, either the NRE account or the NRO account must be opened. Here is how you can open either account even though you are settled abroad.

Step 1 – Contact the bank

The first step you need to take is to contact the bank. You can either contact them through mail or call their helpline. Several of the major banking institutes also have a digital enquiry form which you can fill up, wherein which, a representative from the respective bank will call you back. Ensure that you talk to a representative from the bank and get the required details about the NRI account you would want to open.

Step 2 –Book an appointment to fill the account opening form

Once the necessary contact has been made with the bank representative and the information required, you will need to fill up the account opening form then. Normally the bank will provide you with the required paperwork through attachments or emails. Normally, it would take 20 minutes or less to fill up. However, it is best to book an appointment with the bank to get the required assistance to fill up the paperwork required. If you are unaware or unsure of any details within the form, you can leave it blank, until you get the required clarification.

Step 3 – Get your documents assembled in order
As the part of the loan application process, you will need to submit a certain set of documents. However, when filling up the form, you would not want to distract yourself, running around to get the required documents pertaining to the application form. To assist you in this step, you need,
• a copy of the first and last page of your passport
• a copy of the visa page on your passport
• proof of residence through documents such as your driver’s license, phone or utility bills
• passport photographs

As per the bank you are applying at, you may need to notarize or self-attest these documents. Once these documents are verified, your bank will proceed to contact you with the next step.

Step 4: Write a check in your currency or the currency of your resident country

Once your documents are verified, you will need to provide the finance in order to open the NRI account. You can either make the payment in the local currency or in the currency of your residency. You can make it in the form of a check or demand draft.

Step 5 –Deliver it to the bank

Once the required documents are filed, application form is filled and the finance provided, you will need to send these requirements to the bank through a mail. You may need to send it to the PO box or to the Indian address.

NRE account: All you need to know about crediting and debiting through this account

Plenty of individuals who have settled abroad, look for opportunities to invest back home. There are plenty of options available in the market, with the NRI accounts being one of the most popular options.

Additionally, within the NRI account, the non – resident external account has been one of the most favorable ones. This NRE account can be used as savings, current, recurring, or fixed deposit accounts, and depending on your financial needs. It also permits the account holder to invest and hold foreign currency. To make the most of this account here is what you need to be aware of:

What are the permitted credits to the account?

The following factors are permitted as credits to the account:

• The proceed of remittance in any currency is permitted to India.
• If the account holder is one a temporary visit to India, the proceed of personal cheques drawn on his foreign currency accounts, bank drafts or travelers cheques may be credited.
• The traveler’s cheques must be issued outside India. Alternatively, the bank drafts should be standing or endorsed in the name of the account holder.
• The proceed of the foreign currencies or bank noted tendered by the account holder should be supported by a currency declaration form whenever applicable.
• Any transfer from another NRE or FCNR account is permitted
• Any interest that is accrued on the funds within the account can be credited in the account.
• The interest accrued on government securities or dividends can be credited to the account. However, it must be proven that the securities or units that were purchased by debit, and deposited in the account holders NRE or FCNR account. Alternatively, it must also be proven that it was an out of inward remittance through normal banking channels.
• The maturity proceeds of government securities can be deposited in the NRE account. However, they must be proven that they were originally purchased by debit, to the account holder’s NRE or FCNR account. Alternatively, it must also be proven that it was an out of inward remittance received in a free foreign exchange from outside India.

What are the permitted debits to this account?

The following factors are permitted as debits from the account:
• Local disbursements can be permitted as debits
• Remittances from outside India can be permitted as debits
• The transfer of funds to NRE or FCNR accounts of the account holder, or any other person that holds the power of attorney to the account.
• Investments in the form of shares, securities, or commercial paper of an Indian company can be debited. Funds can also be debited from this account for the purchase of immovable property within India, provided that the purchase is made in accordance with the regulations granted by the Reserve Bank of India.