Secured versus unsecured personal loan and interest rates

A borrower must always be aware of the kind of loan he/she is applying for before opting for it. A smart borrower will definitely be aware of the different varieties of loans available before deciding upon one which is most suitable for him or her.

There are basically two kinds of loans:

1. Secured loans
2. Unsecured loans

Secured personal loans:

Secured personal loans are the most common kind of loans opted for by borrowers. In case of such loans the borrower provides a collateral as a security to the lender. A collateral is anything which is valuable and which owned by the borrower. This could be some form of land or property, vehicle or even gold.  Collateral reduces the risk of the lender because it makes it possible for the lender to recover the money in case the borrower is unable to repay the loan. Again, because the lender has something of value as security, relatively lower personal loan interest rate will be charged. The lender may also be willing to loan a high amount because he has some security which provides a sort of backup in case the borrower is unable to pay back the full loan amount.

Unsecured personal loans:

When the lender lends a borrower some money without any collateral or security at his own risk, such a loan is an unsecured personal loan. In case of an unsecured loan the lender charges a high interest rate because there is risk involved. If the borrower is unable to pay the loan amount back partially or totally then the lender’s loaned amount will not be recovered. This means that a lender takes more risk in case of providing an unsecured loan. So, naturally a high personal loan interest rate will be charged.

The main points of difference between these two types of loans are:

• In case of an unsecured loan the loan amount is usually smaller and limited, but in case of a secured loan the amount may be quite high as a collateral is provided.
• For a given amount to be borrowed, a very high personal loan interest rate will be charged in case of an unsecured loan as against a secured loan.
• From the point of view of the lender higher risk is involved in case of an unsecured loan.

One can either opt for a secured loan or an unsecured loan, depending on the type of security they have. A number of business men prefer to obtain secured loans to expand their business. They generally acquire the loan against gold or land as security.

Business Loan Checklist: How to get the best loan rates

Every business needs cash flow to continue and grow steadily. Sometimes it may become difficult to have sufficient amount of cash available. In such cases, an entrepreneur can always opt for a business loan. A business loan assures this cash flow for day to day requirements of the business.

The following points can help a borrower secure a loan at a good rate:

• Keep documentation ready:
Most financial institutions seek to lookout for the business plan of the entrepreneur to check the credit worthiness of the loan.

• Build loan credibility:
A credible credit history always helps in getting business loans at interest lower rates.  A credible business history will go a long way in obtaining unsecured business loans. A decent credit score will help the business in obtaining a bank loan. By paying your credit card bills on time and by timely loan repayments one can assure that their credit score is good.

• Regularity of cashflow:
A regular and continuous cashflow is indicative of a healthy well-run business. So, if as an entrepreneur you are able to show this on then business balance sheet, you will successfully increase your chances of getting a good deal on the loan.

• Prepare a detailed plan on how the loan will be invested:
Before lending any loan amount to a business, any lender will definitely be interested to know about how the money will be used. This is because the lender wants to ensure that they will get their money back along with the interest.
Before going to a bank to seek a business loan, one must have a detailed plan about how they want to use the money to expand the business. Expansion of business, buying fixed assets, administrative use are some ways in which the credit can be fruitfully used.

• Being well prepared:
As an entrepreneur who is going to apply for a loan one should be well prepared with information about their own business. If a borrower can answer the bank’s queries satisfactorily they will be assured that you know what to do with the money. This will make them more confident about your venture. Swift and prompt answers that are well thought out, will definitely impress the lenders, and one may be able to secure a good deal on their business loan.

The above points are simple yet effective ways by which entrepreneur can assure that his business gets a loan from a bank at a good rate. This will help one run a business smoothly and carry out the expansion plans they have without any financial glitches.

Are you aware of the features of the personal loan calculator?

One of the most important functions of a bank is to provide loans to its customers. Loans are of various kinds depending on the reason for which they are being taken such as home loans, business loans, car loans and personal loans.
 
A personal loan is a loan which is given to an individual to meet his financial needs for personal reasons, such as funding a wedding or a vacation or even supplementing the current income. Each kind of a loan is provided at an interest rate. This interest rate is calculated by considering several factors making its calculation slightly tedious.  A personal loan calculator simplifies this task.

A personal loan calculator is a tool which helps you in calculating the EMI for a given loan amount, which depends on several variables. Before using the calculator, one should know about the loan amount required, the tenure of the loan and the interest rate which you will be able to pay on a monthly basis. After knowing these three answers one will be able to use the personal loan calculator efficiently.

The main features of a personal loan calculator are as follows:

• Two important areas need to be considered while opting for a personal loan – the monthly interest rate and the EMI or the equated monthly installment. It is relatively easy to calculate the monthly interest rate but calculation of EMI is a little difficult. The personal loan calculator helps in calculating both.

• This tool will help in calculating the EMI amount accurately. This is because the calculation is precise and based on the variables entered into the tool by the prospective borrower.

• Using the tool will definitely prove to be more time saving than using pen and paper, which will take a lot more time to reach the final result. Moreover it may or may not be as accurate as the one provided by the calculator.

• This calculator may be used again and again to test various combinations till one arrives to the result that suits them the best.

• A personal loan calculator is a useful tool because it will help one know about the amount they need to set aside each month to pay the EMI. One may use this tool even at the planning stage before applying for the loan, as the calculator is easily available online.

It is simple to use a personal loan calculator. One should have some information including principal amount, tenure of the loan and interest rate. By feeding this data into the calculator the EMI can be obtained.

What is a quick loan? Opt for a personal loan today

A number of banks offer their customers the option of quick loans. But what are quick loans? How do they work? Are they any different than other types of loans? Well, quick loans are just personal loans, but they are approved and sanctioned much faster. While other types of loans such as a home loan, car loan or a property loan do take quite a bit of time for approval and sanction, quick personal loans may be approved within a day or two.

Thus, a quick loan may be opted for in case of a financial emergency. One may opt for a quick loan if they urgently require funds for their business or money to pay medical bills. Quick loans are generally unsecured personal loans. With the introduction of quick personal loans one does not need to take loans from their friends and family members during any financial emergency. They only need to approach their bank for help.

There are various types of quick personal loans that one can opt for, such as-

• Same day quick loans- Such a loan is approved and sanctioned on the same day of application. This loan does not involve a credit check and only limited documentation is needed. But, in case of same day loans the interest rate charged is quite high as compared to other personal loans.
• Payday quick loans- This type of loan is for a short term and is unsecured. It is sanctioned within hours of application. In fact, one can apply for this type of a quick loan online and expect approval within 48 hours.
• Credit cards- One of the most used forms of quick loans are credit cards. In case of credit cards, one does not even require documentation in most cases.
• No-credit check quick loans- For individuals who do not have a good credit history and score, a no-check quick loan is a great option. But, in case of this type of quick loan the rate of interest charged is extremely high.

Some advantages of quick personal loans are-

• Quick approval and sanction of the loan.
• Credit history and score is not checked in most cases.
• The documentation required is minimal.
• The loans is unsecured
• One can apply for it online
• It is also given to self-employed individuals
• A quick loan can also be sanctioned to a customer who does not have any prior relationship with the bank.

While quick personal loans are definitely a boon during the time of need, one cannot ignore the high rate of interest that it comes with. Moreover, they are generally short term loans and have to be paid back fast. One should apply for a quick loan only if he can pay it back in time.

Calculate the best rates with the FD calculator

Banks are financial institutions which provide a number of services to their customers such as accepting deposits, providing locker facilities, foreign exchange services, providing loans and overdraft facilities.  These deposits are of various kinds such as savings deposits, recurring deposits, fixed and current deposits. The deposits are categorized based on the rates of interest provided.

Fixed deposit is a financial instrument which is provided by a bank to its customers so that they are able to obtain interest earnings, which are more than those obtained from keeping money in a regular savings account. In case of a fixed deposit, the interest rate provided by the bank is higher because the money must remain untouched till the given maturity date. A fixed deposit calculator or an FD calculator may be useful in obtaining the best rates, if an individual is planning to use the fixed deposit facility to assure safe investment.

A question may arise as to why opt for fixed deposits when other financial instruments are available. The following points indicate the benefits of fixed deposits:

• Fixed deposits are the safest modes of investment.
• Fixed deposits assure a fixed source of income. Mostly the interest rates are compounded quarterly and so those who want regular earnings can use fixed deposits as a source of income. It is a popular mode of investment among retired individuals.
• Fixed deposits encourage the habit of saving which is beneficial in the long term.

A FD calculator is basically an instrument which enables one to calculate the return on the principal amount invested. Now, the return or the rate of interest depends on several factors. A FD calculator considers all these factors and then calculates the best rate possible. The factors affecting the interest rates are:

• Age of the customer: a higher rate of interest is provided to senior citizens. Thus, they can save as well as earn by investing in fixed deposits.
• Principal Amount: the interest rate depends on the amount initially invested.
• Period of deposit: banks provide higher rates of interest to customers who invest in fixed deposits for a longer period of time. There are also term deposit for 5 years and even more.

Based on the factors stated above a FD calculator, calculates the rate of interest which can be provided and also the end of the term earnings of the customer.  Thus, it a very useful device which calculates the end of term and annual earnings of a customer considering all the variables, assuring that the investor benefits through a FD.

Take advantages of these features of the Fixed Deposit Calculator

Fixed deposit plays a very significant role for many who want to save. It is an effective instrument used by investors for a good one time return. It brings in a good sum of money, which includes the money saved and the interest earned on it at maturity.

A fixed deposit calculator is used to calculate the interest that one will earn on a particular sum for a certain period of time. Fixed deposit calculators can be found on the website of most banks. It is quite an efficient tool, and is convenient to use. It simplifies complicated calculations for customers, and allows them to make an effective comparison of the interest rates that are being offered by various banks.

So the various advantages of the fixed deposit calculator are as follows:

• Necessary Information
Before investing a huge amount the customers/investors need assurance as to what return they will be getting after the maturity period. The fixed deposit calculator will provide them with necessary information such as the total interest they will earn on the amount that they have fixed. It is very important to make an account of the necessary details of a fixed deposit before investing in it.

• Hassel free
For many customers/investors calculating the fixed deposit interest rate offered by various banks becomes extremely difficult. The fixed deposit calculator allows them to calculate the interest that they will earn on the sum they are investing with just a click of a few buttons. One only needs to enter the required figures that the calculator asks for to get the complicated math done.

• Comparison
With the help of the fixed deposit calculator, customers/investors can compare the interest rate offered by a number of banks for a particular term, and decide which bank will provide them with better benefits. Thus, they can effectively invest in the bank of their choice.

• Self-reliant
Very often a prospective investor may need to take the help of a bank employee to figure out the details of the term of a fixed deposit. This can prove to be quite time consuming, as one has to go to the bank, wait for their turn and on occasion even pay a couple of visits. But a fixed deposit calculator allows him to find out details on his own at any time.

Thus, the fixed deposit calculator is a convenient tool which will help customers/investors make their own choice and take independent decisions. Their investment will be their choice. The risk of confusion is reduced. The customers/investors feel satisfied and make investment which is best suited for them.

Consolidating multiple Demat accounts: all that you need to know

Demat account stands for dematerialised account. They are usually opened by an investor when they are registering with a sub broker or an investment broker. It implies that the shares and securities are held or taken possession off not by the investor physically but electronically in a dematerialised account, that is, a demat account.

In simple words it is an electronic savings account found in India.

Advantages of a demat account-

• A major benefit of using a demat account is that instead of holding shares on paper, one can save all their shares in electronic form and keep a track and account of them with less fear of losing the records or theft of stocks etc.
• Storing records electronically, reduces the difficult task of handling heaps of stock certificates as well.
• A demat account is also considered as an absolute must when it comes to trading in stocks and ETFs.
• Another plus point of a demat account is that it does not attract stamp duty.
• The investor becomes the legal owner of the securities once it is credited to the person's account and there isn’t any requirement to pass it through the company's registrar.

How to consolidate a demat account?

 The account holder requires to pay a visit to the DP office or branch and submit the necessary forms and documents if he wishes to consolidate his demat accounts.

 He will require a delivery instruction slip or DIS. It is like a cheque leave that sanctions transfer of securities from one demat account to another. This DIS needs to be filled in and signed before it is handed over to the depository participant’s office.

Benefits of consolidating demat accounts:

 Having separate or multiple demat accounts implies that one has to incur a large fee with every transaction made. But if the accounts are consolidated, the transaction fee for a single account is not much. This way a person can save up on annual fees and charges on several demat accounts.

 Dealing with multiple accounts means dealing with a lump sum of paperwork. This hassle free task can be taken care of with the consolidation of demat accounts. This eventually also makes tax filing easier.

 Consolidating demat accounts is extremely easy and simple.The entire process becomes an off-market transaction and all that is required is a delivery instruction slip or a DIS which includes the details of the transfer value and the destination account.

 If a broker has only one account with a DP, only a single request form is needed. Joint accounts require that this slip be signed by all owners. Many DPs usually charge fees for transfer of securities. A major benefit of joining accounts in the name of a single person is the tax exemption one can apply for.

Consolidating demat accounts will prove to be quite beneficial in the long run and should be considered to make transactions more efficient.